Last to last year, Caterpillar was number 62 on our list. Last year, it inched up 61 ranks to take the top slot. The company manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. It operates through two lines of businesses: Machinery and Power Systems, and Financial Products.
The Machinery business offers construction, mining, and forestry machinery, including track and wheel tractors, track and wheel loaders, pipelayers, motor graders, wheel tractor-scrapers, track and wheel excavators, backhoe loaders, log skidders, log loaders, off-highway trucks, articulated trucks, paving products, skid steer loaders, underground mining equipment, tunnel boring equipment, and related parts. It also manufactures diesel-electric locomotives and manufactures and services rail-related products and logistics services for other companies.
The Power Systems business provides diesel, heavy fuel, and natural gas reciprocating engines for Caterpillar machinery, electric power generation systems, marine, petroleum, construction, industrial, agricultural, and other applications. It offers industrial turbines and turbine-related services for oil and gas, as well as power generation applications. It also remanufactures Caterpillar engines, machines, and engine components and offers remanufacturing services for other companies.
The Financial Products business provides retail and wholesale financing alternatives for Caterpillar machinery and engines, solar gas turbines, and other equipment and marine vessels. It also offers loans and various forms of insurance to customers and dealers. And, it provides financing for vehicles, power generation facilities, and marine vessels.
The company markets its products directly, as well as through its distribution centers, dealers, and distributors. It was originally organized as Caterpillar Tractor Co. in 1925 in California. In 1986, the company reorganized as Caterpillar Inc. in Delaware. Caterpillar Inc. is headquartered in Peoria, Ill.
Cat’s Competitive Landscape
Demand for machinery depends on overall industrial activity and on the health of sectors such as agriculture, construction, and power generation. The profitability of individual companies depends on engineering expertise and efficient production. Large companies have economies of scale in purchasing. Small companies can compete effectively by specializing.
The industry is capital-intensive, as average annual revenue per worker is about $300,000. It encompasses a number of segments: construction, mining & other heavy equipment manufacturing; electronics; electrical products; power generation & storage transportation services; and logistics services.
When it comes to machinery, Caterpillar’s chief competitors include Cummins Inc., Tognum AG, GE Energy Infrastructure, Siemens Energy, and Wartsila Corp. Other competitors, such as John Deere Power Systems, MAN Diesel SE, Mitsubishi Heavy Industries Ltd., Volvo Penta (part of Volvo Group AB), Kawasaki Heavy Industries, multiple emerging Chinese competitors, and Rolls Royce Group plc compete in other markets where Caterpillar is active.
An additional set of competitors, including Generac Power Systems Inc. and Kohler Co., includes packagers that source engines and/or other components from domestic and international suppliers and market products regionally and internationally through a variety of distribution channels.
In the engines space, Komatsu Ltd., Volvo Construction Equipment (part of the Volvo Group AB), CNH Global N.V., Deere & Co., Hitachi Construction Machinery Co., J.C. Bamford Ltd., Doosan Infracore Co. Ltd., and LiuGong Construction Machinery N.A. LLC all have varying numbers of product lines that compete with Caterpillar products, and each has varying degrees of regional focus.
The Secret Of Its Success
Infrastructure investment is back, which is a key force behind Caterpillar’s ascension to the top ranking in this year’s Top 50. The company continued its strong performance in the first quarter of 2011 with sales up 57% and profits up more than 400%, the most profitable quarter in the company’s history. Most of the sales increase came from machinery and power systems, which were up 61%. Financial products were basically flat.
Within machinery and power systems, construction industries were up 71%; resource industries, up 84%; and power systems sales were up 51%. Most of the increase came from higher customer demand, but dealers did increase their inventories to meet future demand as well. There was also some improved pricing, as well as the acquisition of Electro-Motive Diesel (EMD), a maker of diesel-electric locomotives, contributing to the sales increase.
Sales improved in all four major geographic regions; North America, up 72%; Latin America, up 90%; Europe Africa/Middle East, up 67%; and Asia/Pacific, up 35%. While commercial construction in the U.S. is still very depressed and machinery sales are at about half the 2006 peak, it appears aging machines are starting to be replaced.
During the recession, Caterpillar’s customers cut machine purchases much more rapidly and deeply than the overall construction spending decline. As a result, their fleets both shrunk in size and got older. However, customers are beginning to buy enough machines now to slow or stop their fleets from continuing to degrade.
Mining activity and higher commodity prices, including coal, have encouraged investment in large mining equipment. Higher sales to oil and gas and electric power customers, along with the acquisition of EMD, drove the increase in power systems sales.
While the reasons for European growth mirror North America, basically replacement, growth in developing countries has been good and is driving investment in infrastructure and increased demand for commodities. Incremental margins were good in the construction industries, resource industries, and power systems segments. The company executed well in the quarter and controlled its costs.
Besides EMD in 2010, the company has announced the fairly large acquisitions of MWM Holding GmbH, a Mannheim, Germany-based manufacturer of combustion engines, and Bucyrus International, a company that designs, manufactures, and markets surface and underground mining equipment.
Caterpillar’s facilities in Japan were not damaged by the earthquake and tsunami, but many of its suppliers in Japan were. Caterpillar expects to experience sporadic production disruptions at many facilities around the world, which will have a negative impact on sales, factory efficiency, and costs like premium freight. While the situation is improving, the biggest impact will be felt in the second quarter of 2011./p>
Since the end of the first quarter of 2010, Caterpillar has added almost 21,000 people to its global workforce. About half are full-time employees, and about half are flexible workforce. In total, that represents an increase of over 19% in the total global workforce.
Cash flow has shown excellent improvement, while the machinery and power systems debt-to-equity ratio dropped from over 47% at year-end 2009 to 34.8% at year-end 2010, down to 30.4% at the end of the first quarter of 2011. That’s a drop of almost 4.5 points from year-end, which is an excellent improvement.
While there are some capacity constraints currently forecast for some products such as excavators and many of the company’s large mining products, Caterpillar continues to invest in capacity increases around the world to be prepared for 2012 and beyond, including substantial investment in the U.S. In fact, more than half of the $3 billion that it expects to spend on capital expenditures in 2011 is being invested in the U.S.
After a couple of very tough years, the continued high investment in infrastructure throughout developing countries and the continued replacement of aging machinery in Europe and the United States has Caterpillar well positioned to continue its rebound in growth. If commercial construction rebounds in North America and Europe as well, it will only make the company’s prospects even stronger.
Here are some fresh new pictures of the BlackBerry 9700 (Onyx). The BlackBerry Onyx 9700 should come as a refreshment of the Bold, featuring 3G support, Wi-Fi with UMA, GPS and a 3.2-megapixel camera with flash. In addition, the Onyx has a 3.5mm jack and a microSD slot.Blackberry Bold 9780 has been unveiled some weeks ago and today this handset is resurfaced again as we got the more information and detail of it. One thing that we noticed is that the RIM when launches a new model it some what resembles with previous one .Now we observe that Bold 9780 smartphone is the brother of 9700 model of Blackberry.
Blackberry Bold 9780 has the Blackberry OS 6.0 and we can say with surety that this new model is planned to replace the 9700 model .Although it will come with some new features and functionalities but we sure that the it will be an upgrade .In terms of its specifications this model of Blackberry has bear a striking resemblance with 9700.
Since this review first when live in late May, a few things have changed in regards to this review. First, the "onyx" became branded with a 9020 device model, which recently changed again to become the BlackBerry 9700 and now for sure will be labeled as the BlackBerry Bold 9700. Hardware-wise, compared to unit featured in this review, a few other things have changed, namely the device will feature a touch sensitive trackpad (as seen on the Curve 8520) instead of the trackball, and the BlackBerry Bold 9700 will also feature a leather back on it. And above the battery door, engraved into the rubber will be the word "Bold".
Pre-release review time! Rumors of the BlackBerry device model with the codename "Onyx" have been floating around for a while now and were proven legit when the first photos of it surfaced here at CrackBerry back on May 10th. After going hands-on with the Onyx, I think it's safe to say THIS IS the traditional (no touchscreen) BlackBerry smartphone so many of us have been waiting for. It always seems that every new BlackBerry smartphone makes a compromise somewhere on its specifications and feature sheet - be it the Bold's camera, or the Curve 8900's lack of 3G, or the Tour 9630's lack of WiFi, or the Storm's lack of memory and snappy OS.
