Despite some of the weakest markets in a decade and a sluggish global economic recover, Caterpillar, Peoria, Ill., delivered optimistic financial results in 2002. In its annual report, issued earlier this month, the company credits a strong diversification strategy, a tremendous effort from employees and the power of 6 Sigma to produce breakthroughs in cost reduction, quality and process improvement for the company's success.
"Simply put, Caterpillar is not the same company we were 10 years ago," said Chairman Glen Barton in his letter to company stakeholders. "We've made some hard choices to diversify our business so we're not only the 'tractor company' we used to be known as. Since the declared start of the recession in March 2001, Caterpillar's stock traded up three percent versus the S&P 500 decline of more than 24 percent."
In 2002, Cat achieved sales and revenues of $20.15 billion compared to $20.45 billion in 2001. The decline of about 1% was due to lower sales volume, partially offset by improved price realization. Profit for the full year was $798 million compared to $805 million, down less than 1% from 2001. Excluding the $97 million after-tax impact of unusual charges recorded in the fourth quarter of 2001, profit declined 12% due to lower sales volume and related manufacturing inefficiencies.
Caterpillar's accomplishments in 2002 include:
* Investing $4 million each working day in technology including the ACERT technology designed to meet new EPA engine emissions standards while providing a clean diesel solution for the trucking, bus, construction and mining industries;
* Using 6 Sigma to help deliver solid results in difficult times by improving processes, enhancing quality, cutting costs and providing greater value to customers; and
* Continuing to strengthen the company's broad base of products and services as the sales of compact products increased and strong growth continued in both financial services and logistics businesses.
