Cat Financial Announces Second Quarter 2008 Results
July 22 2008 - 6:31AM
PR Newswire (US)
NASHVILLE, Tenn., July 22 /PRNewswire-FirstCall/ -- Caterpillar
Financial Services Corporation (Cat Financial) today reported
record second-quarter revenues of $785 million, an increase of $38
million, or 5 percent, compared with the second quarter of 2007.
Second-quarter profit after tax was $130 million, a $7 million, or
6 percent, increase over the second quarter of 2007. Of the
increase in revenues, $101 million resulted from the impact of
continued growth of earning assets (finance receivables and
operating leases at constant interest rates), and $7 million
resulted from a net increase in various other net revenue items,
including $12 million related to gains on the sales of receivables.
These increases were offset by a $70 million decrease from the
impact of lower interest rates on new and existing finance
receivables. On a pre-tax basis, profit was $176 million, down $11
million, or 6 percent, compared with the second quarter of 2007.
The decrease was principally due to higher provision expense of $21
million and an $11 million increase in general, operating and
administrative expense, offset by an increase of $15 million in
margin (wholesale, retail finance, operating lease and associated
fee revenues less interest expense and depreciation on assets
leased to others) and a $7 million net increase in various other
net revenue items, including $12 million related to gains on the
sales of receivables. The increase in margin principally resulted
from the growth in average earning assets over 2007 of $3.72
billion. Provision for income taxes decreased $18 million, or 28
percent, compared with the second quarter of 2007. The decrease was
primarily attributable to favorable changes in the geographic mix
of pre-tax profits. New retail financing was a record $4.60
billion, an increase of $944 million, or 26 percent, from the
second quarter of 2007. The increase was the result of increased
new retail financing primarily in our Asia-Pacific, Diversified
Services and Europe operating segments. Past dues over 30 days at
June 30, 2008 were 3.35 percent compared to 2.09 percent at June
30, 2007. Write-offs, net of recoveries, were $19 million for the
second quarter of 2008 compared to $12 million for the second
quarter of 2007. Both of these increases were primarily due to the
continued softening of the U.S. housing industry. Caterpillar Inc.
Vice President and Cat Financial President Kent M. Adams said, "Cat
Financial's record new business and strong profit combined with our
diversified funding platform continues to demonstrate our ability
to deliver reliable earnings. Although past dues are up from last
year, our portfolio continues to perform very well with write-offs
as a percentage of the retail portfolio in-line with the five-year
historical average. During this time of economic uncertainty in key
markets, we continue to work to be a reliable source of financing
for Caterpillar customers and dealers." For more than 25 years, Cat
Financial, a wholly owned subsidiary of Caterpillar Inc., has been
providing a wide range of financing alternatives to customers and
Caterpillar dealers for Caterpillar machinery and engines, Solar
(R) gas turbines and other equipment and marine vessels. Cat
Financial has offices and subsidiaries located throughout the
Americas, Asia, Australia, Latin America and Europe, with
headquarters in Nashville, Tennessee. STATISTICAL HIGHLIGHTS:
SECOND QUARTER 2008 VS. SECOND QUARTER 2007 (ENDING JUNE 30)
(Millions of dollars) 2008 2007 CHANGE Revenues $785 $747 5% Profit
Before Tax $176 $187 (6%) Profit After Tax $130 $123 6% New Retail
Financing $4,597 $3,653 26% Total Assets $32,413 $27,616 17% SIX
MONTHS 2008 VS. SIX MONTHS 2007 (ENDING JUNE 30) (Millions of
dollars) 2008 2007 CHANGE Revenues $1,564 $1,460 7% Profit Before
Tax $359 $369 (3%) Profit After Tax $254 $248 2% New Retail
Financing $8,071 $6,397 26% SAFE HARBOR STATEMENT UNDER THE
SECURITIES LITIGATION REFORM ACT OF 1995 Certain statements
contained in this earnings release may be considered
"forward-looking statements" and involve risks and uncertainties
that could significantly impact results. In this context, words
such as "believes," "expects," "estimates," "anticipates," "will,"
"should" and similar words or phrases often identify
forward-looking statements made on behalf of Cat Financial. It is
important to note that actual results of the company may differ
materially from those described or implied in such forward-looking
statements based on a number of factors and uncertainties,
including, but not limited to changes in economic conditions;
currency exchange or interest rates; political stability; market
acceptance of the company's products and services; significant
changes in the competitive environment; changes in law, regulations
and tax rates; and other general economic, business and financing
conditions and factors described in more detail in the company's
Form 10-K filed with the Securities and Exchange Commission on
February 22, 2008. We do not undertake to update our
forward-looking statements. DATASOURCE: Caterpillar Inc. CONTACT:
Jim Dugan, Corporate Public Affairs of Caterpillar Inc.,
+1-309-494-4100, cell, +1-309-360-7311, Web site:
http://www.cat.com/
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