Business Context and Reporting Period
This Form 8-K, filed on March 13, 2019, by Caterpillar Inc. (Caterpillar), provides supplemental Regulation FD disclosure regarding retail sales statistics. The report details rolling 3-month retail sales of machines and power systems to end users and Original Equipment Manufacturers (OEMs) for the periods ending December 2018, January 2019, and February 2019. The data is intended to bridge the time delay between Caterpillar's sales to dealers and dealers' sales to end users.
Key Financial Metrics and Sales Trends
The filing presents percentage changes in retail sales compared to the prior year, reported in constant dollars. Specific revenue, profit, cash flow, or debt figures are not included in this document.
Total Machines Retail Sales (Rolling 3 Months)
- February 2019: World sales UP 7% (North America UP 13%, Latin America UP 12%, EAME UP 2%, Asia/Pacific UNCHANGED).
- January 2019: World sales UP 9% (North America UP 20%, Latin America UP 4%, EAME UP 5%, Asia/Pacific DOWN 4%).
- December 2018: World sales UP 10% (Latin America UP 17%, North America UP 14%, EAME UP 9%, Asia/Pacific UP 3%).
Segment Performance
- Resource Industries (Feb 2019): World sales UP 7%. North America (UP 17%) and Latin America (UP 18%) showed strong growth, while EAME declined 13%.
- Construction Industries (Feb 2019): World sales UP 8%. North America (UP 13%) and EAME (UP 10%) grew, while Asia/Pacific declined 2%.
- Energy & Transportation (Feb 2019): Total sales DOWN 1%. Transportation (UP 10%) and Power Gen (UP 8%) increased, offset by declines in Oil & Gas (DOWN 10%) and Industrial (DOWN 3%).
Material Changes Versus Prior Period
Global retail sales of machines have remained positive for three consecutive months, though the growth rate moderated from 10% in December 2018 to 7% in February 2019. Regional performance remains divergent:
- North America: Continued strong growth in both Resource and Construction segments, though the rate of increase in Resource Industries slowed from 44% in January to 17% in February.
- Asia/Pacific: Shifted from growth in December (UP 3%) to a decline in January (DOWN 4%) and remained unchanged in February.
- Energy & Transportation: The segment turned negative in February (DOWN 1%) after positive growth in the two prior months, driven primarily by a 10% decline in Oil & Gas sales.
Guidance, Outlook, and Risks
The filing contains no specific financial guidance or forward-looking projections for future earnings or revenue. It includes a standard disclaimer that the data is unaudited, based on voluntary dealer reports, and not a substitute for audited financial statements.
Key Risks and Contingencies Identified:
- Global and regional economic conditions and commodity price fluctuations.
- International trade policies, including tariffs, and their impact on demand.
- Currency fluctuations and interest rate changes.
- Inventory management decisions by dealers and OEMs.
- Political risks and commercial instability in operating countries.
- Financial Products segment risks, including delinquencies and credit ratings.
Important Facts for Investor Verification
- Data Source Limitations: Sales figures are based on unaudited reports from independent dealers and may not be accurate or complete; they are not subject to Caterpillar's internal controls over financial reporting.
- Segment Definition Changes: Beginning January 2019, feller bunchers, harvesters, knuckleboom loaders, and skidders were excluded from the Construction Industries segment data (though included in Total Machines).
- Exclusions: Retail sales of longwall miners are explicitly excluded from Resource Industries and Total Machines statistics.
- Constant Dollars: All percentage changes are reported in constant dollars to remove the impact of currency fluctuations.
- Oil & Gas Volatility: The Energy & Transportation segment showed significant volatility in Oil & Gas sales, swinging from UP 16% in December to DOWN 10% in February.