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Cat Financial Announces Q3 2011 Results

October 24, 2011, 08:02 AM
Filed Under: Corporate Earnings

Cat Financial reported third-quarter 2011 revenues of $668 million, an increase of $28 million, or 4 percent, compared with the third quarter of 2010.  Third-quarter profit after tax was $93 million, a $20 million, or 27 percent, increase from the third quarter of 2010.
The increase in revenues was principally due to a $28 million favorable impact from higher earning assets (finance receivables and operating leases at constant interest rates) and a favorable impact from miscellaneous net revenue items, partially offset by a $17 million unfavorable impact from lower interest rates on new and existing finance receivables.

Profit before income taxes was $126 million for the third quarter of 2011, compared to $89 million for the third quarter of 2010.  The increase was principally due to a $17 million decrease in the provision for credit losses, a $13 million favorable impact from higher net yield on average earning assets, and a favorable impact from miscellaneous net revenue items.  These increases were partially offset by a $13 million increase in general, operating and administrative expense.

The provision for income taxes in the third quarter of 2011 reflects an estimated annual effective tax rate of 25 percent compared to 24 percent in the third quarter of 2010.  The actual 2010 third-quarter tax rate was reduced by a benefit of $12 million related to prior years.  The 2011 estimated annual effective tax rate is expected to be less than the U.S. corporate tax rate of 35 percent primarily due to profits in tax jurisdictions with lower tax rates.

New retail financing in the third quarter of 2011 was $2.6 billion, an increase of $161 million, or 6 percent, from the third quarter of 2010.  The increase was primarily a result of improvements in our Asia-Pacific and Mining operating segment.

At the end of the third quarter of 2011, past dues were 3.54 percent, a decrease from 3.73 percent at the end of the second quarter of 2011, 3.87 percent at the end of 2010 and 4.88 percent at the end of the third quarter of 2010.  Write-offs, net of recoveries, were $50 million for the third quarter of 2011, down from $78 million in the third quarter of 2010.

As of September 30, 2011, Cat Financial's allowance for credit losses totaled $362 million or 1.49 percent of net finance receivables, compared with $363 million or 1.57 percent of net finance receivables at year-end 2010.  The allowance for credit losses as of September 30, 2010, was $367 million, which was 1.61 percent of net finance receivables.

"We are very pleased with our third quarter results," said Kent Adams, Cat Financial president and vice president of Caterpillar Inc.  "New business, write-offs, past dues and profit all improved from last year, with past dues being at the lowest level since the second quarter of 2008.  With our continued focus on managing our portfolio, ensuring an outstanding customer experience, and maintaining access to attractive funding, Cat Financial is well positioned to support Caterpillar customers and dealers around the world."







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