Caterpillar Sees Return To 2008 Sales Level Within 5 Years
June 10 2009 - 7:52PM
Dow Jones News
Caterpillar Inc.'s (CAT) top executive told shareholders he is
confident the construction equipment maker will be able to return
to the record-setting revenue level set in 2008 within the next
five years.
Caterpillar warned in April that the downturn in the global
economy could drag this year's sales and revenue lower by more than
30% from the $51.3 billion reported in 2008. But Chairman and Chief
Executive James Owens predicted Wednesday there is an "80% chance
that in the next five years we'll be over $50 billion" again.
Owens said the Peoria, Ill.-based company's goal of $100 billion
in annual sales and revenue by 2020 remains attainable for the
world's leading manufacturer of construction machinery.
"The world cannot prosper without the stuff we make," he said at
the company's annual shareholders meeting in Chicago. "We're the
Coca-Cola of the manufacturing world. We're number one or number
two on virtually every continent"
Owens said infrastructure construction in developing countries
will fuel robust demand for the company's bulldozers, motor
graders, excavators and other equipment. Last year, 66% of
Caterpillar's sales came from customers outside of the U.S., an 18%
increase from 2003.
But Owens, who is a member of the Obama administration's
Economic Recovery Advisory Board, warned that protectionist trade
policies, onerous taxes on foreign profits and other proposed
regulations would diminish Caterpillar's growth potential.
Although Caterpillar is among the U.S. companies supporting
climate-change legislation, Owens said, a bill pending in Congress
to create a cap-and-trade system to limit carbon dioxide emissions
would put many U.S. companies at a disadvantage to foreign
competitors.
He also described the proposed elimination of the corporate
income tax deferral on profits earned overseas as "suicide for
U.S.-based multinational companies."
"We're working very hard to make [the administration] understand
that this is not in the best interests of our company," he
said.
As in recent years, the meeting featured several pleas from
Palestinian advocates for Caterpillar to stop selling equipment to
Israel that they say is used by the Israeli military to demolish
the homes of Palestinians.
Caterpillar estimated about $30 million, or 0.06% of its total
revenue last year, came from U.S. government programs or dealers
that sell Caterpillar equipment to the Israeli military.
"To police the use of every piece of equipment every day is
unrealistic," Owens said. "If we sell them zero equipment, they'd
still have access" to equipment from other manufacturers or
Caterpillar equipment sold by used-equipment dealers.
Caterpillar's stock Wednesday closed down 1.63%, or 62 cents, at
$37.62.
-By Bob Tita, Dow Jones Newswires; 312-750-4129;
robert.tita@dowjones.com