21.07.2007

Record sales at CAT as profits slump

The world’s largest cosntruction equipment producer Caterpillar has reported its first half results. Revenues climbed by seven percent to $21.4 billion, almost $20 billion from machinery and engine sales, the balance coming from the finance division.

Sales in North America dropped steeply as dealers reduced inventories and truck engine sales slowed. However overseas sales increased sharply, with the European region leading the charge with a 35 percent increase in machinery sales to $2.26 billion. Total CAT sales in Europe rose by 31 percent to $3.6 billion.

In spite of the rise in overall revenues, after tax profit at the company dropped by 13 percent to $1.64 billion.

The lower profits have been blamed on a sharp downturn in truck engine profitability, weaker North American machine sales, supply chain disruptions and higher material costs.

In spite of this poor first half, Caterpillar is maintaining its full-year profits forecasts.