Caterpillar expects 2010 sales and revenues to increase between 10 to 25 percent compared to 2009, according to its just-released 4th Quarter report.
"We continue to see signs of economic improvement, particularly in China and most developing countries," said Caterpillar Chairman and CEO Jim Owens. "We are also seeing signs of improvement in North America, Europe and Japan. We have seen a marked increase in demand for mining equipment – a result of continued strong commodity prices and growing confidence in economic recovery. We have also seen improvement in sales of aftermarket service parts, which is usually an early indicator of growing demand for machines and engines."
In addition to increased end-user demand, Caterpillar says its sales are expected to improve as a result of changes in dealer inventories in 2009. Dealers reduced new machine inventories by more than $3.3 billion and new-engine inventories by more than $600 million during 2009. This means Caterpillar’s sales in 2009 were below end-user demand by nearly $4 billion.
"We expect relatively little change in dealer inventories in 2010 and as a result, Caterpillar’s sales should be more in line with end-user demand," said Owens. "Dealer sales to end users are up, order rates are up, dealer inventories came down in 2009, and we’re seeing stronger service-parts sales.”
Caterpillar reports it is focused on increasing production levels at its plants and with its suppliers. The company expects higher production in 2010, and has already recalled more than 500 previously laid-off production employees.
“We expect 2010 will be a better year than 2009, and Caterpillar is in an excellent position to benefit from growth in the world economy,” Owens said. -- Posted by Mark S. Kuhar
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