Caterpillar Outlines Aggressive Plans for Growth
23 August 10
At a presentation to analysts and investors at the New York Stock Exchange Caterpillar CEO Doug Oberhelman reviewed the company’s updated five-year strategy and goals. Oberhelman expressed confidence about Caterpillar’s growth opportunities throughout the world and the company’s strategic focus on operational execution, which will drive financial performance over the next five years.
Recently the company has announced investments of U.S. $2.5 billion. These investment are aimed at increasing capacity in nearly all geographic regions around the world and enabling Caterpillar to expand rapidly.
"We have streamlined our organization from the top down, and our leadership team is driving an intense focus on helping our customers succeed," Oberhelman said. "From our factory floors to our research and development laboratories and everywhere across the company, we have the talent in place to win, and as we execute this strategy, we will deliver greater value to our customers, our stockholders and employees."
Oberhelman pointed out that three areas are the focus for its five year plan with the aim of increasing earnings per share growth, operating profit after capital chargeand cash flow. It is aiming to become the global leader in all its business areas.
Since has introduced its Caterpillar Production System implementation the company has made gains in product quality, cost savings and employee safety, plus Caterpillar’s manufacturing efficiency has improved in every quarter since the end of 2008.
"Our primary goal for stockholders is delivering total shareholder returns over the business cycle in the top 25 percent of the S&P(Standard & Poor’s) 500," Oberhelman said. "To do that, we believe that we need to deliver compound annual earnings per share growth of 15 to 20 percent over the business cycle," said Oberhelman. "We performed well during the downturn in 2009, and so far this year we’re doing better than we expected as we came into 2010. Last year, we discussed our 2012 profit goal of sales and revenues in a range of $55 to $60 billion, and earnings per share of $8 to $10 – and that’s still our goal for 2012. We are on the path to 15 to 20 percent growth over the cycle," Oberhelman added.
In just the last two months, Caterpillar has announced a series of investments to open new facilities, expand existing operations, develop a new mining shovel product line and expand into the locomotive business with the acquisition of Electro-Motive Diesel.