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Caterpillar 2015 - The Good, Bad, & Ugly.

January 29, 2016

On January 28, 2016, Caterpillar held an earnings conference call discussing fourth-quarter and year-end 2015 financial results as well as the 2016 outlook. Chairman and CEO Doug Oberhelman, Group President and CFO Brad Halverson, Vice President of Finance Services Mike DeWalt and several analysts participated in the call. Click here to listen to the full conference call.

During the call, Doug presented the following eight important discussion points:

1. 2015 was a tough year: however, profit per share excluding restructuring costs was close to our outlook from January 2015 ($0.11 per share), despite $3 billion of lower sales.

2. Good operational performance continues: better safety, improved market position for machines for the 5th year in a row, quality at high levels.

3. Strong balance sheet and solid operating cash flow: important because our credit rating and maintaining the dividend are high priorities.

4. Cat Financial well managed: portfolio metrics near historic averages, year-end 2015 past dues slightly better than year-end 2014.

5. 2016 looks like another tough year: outlook does not anticipate improvement in the world economy or recovery in commodities.

6. We do not view our inventory or dealer inventory as excessive:we are, however, planning some decline in 2016 in our inventory as a result of lower sales and our continued work on Lean.

7. Substantially lower costs in 2016: expect $900 million lower period costs – largely from restructuring actions previously announced. Variable costs favorable $350 million.

8. Digital, Innovation and R&D: we are continuing to invest for the future.

See Article Below.

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