Cat Financial posts 10.1% revenue growth in Q1

Cat Financial reported first-quarter revenue growth as market conditions continue to improve. 

Cat Financial, the financial services subsidiary of equipment manufacturer Caterpillar, reported Q1 revenue of $947 million, up 10.1% year over year, driven by higher average earning assets, according to an April 30 Cat Financial earnings release. 

Meanwhile, net income rose 10.8% YoY to $144 million, while pretax profit increased 12.1% YoY to $195 million, according to the release. Retail new business volume reached $3.2 billion, a 7.6% increase YoY and the company’s highest Q1 volume in more than 15 years, supported by higher volume in the mining, North America, Asia Pacific and power Divisions. 

 Financial products revenue increased 9% YoY to $1.1 billion, while segment profit rose 14% YoY to $245 million, primarily driven by higher earning assets and insurance margins, but partially offset by higher selling, general and administrative expenses, Andrew Bonfield, chief financial officer at the parent company, said during the company’s earnings call on April 30. 

“Business activity at Cat Financial remains healthy,” he said. “In addition, used equipment inventory levels continue to remain low and conversion rates remain above historical averages as customers choose to buy equipment at the end of their lease term.” 

Additionally, past dues landed at 1.39% in Q1, down 19 basis points YoY, Bonfield said. Cat Financial’s allowance rate was 0.86%, matching Q4 for the lowest quarterly level ever. 

MARKET REACTION: Shares of Caterpillar [NYSE: CAT] were down 0.05% from market open to $889.67 as of market close today. It has a market capitalization of $414 billion.

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