Cat Financial has announced its 3Q16 results. It has reported revenues of US$651 million, a decrease of US$2 million compared to the same period 2015. Profit was US$97 million, down 11% from 3Q15.
The slight decrease in revenues includes a US$10 million unfavourable impact from returned or repossessed equipment and a US$9 million unfavourable impact from lower average earning assets, offset by a US$19 million favourable impact from higher average financing rates.
Profit before income taxes was US$146 million for the third quarter of 2016, compared with US$153 million for the third quarter of 2015. The decrease was primarily due to a US$10 million unfavourable impact from returned or repossessed equipment and a US$7 million increase in provision for credit losses, partially offset by a US$7 million decrease in general, operating and administrative expenses.
The provision for income taxes reflects an estimated annual tax rate of 31% in 3Q16, compared with 29% in 3Q15. The increase in the estimated annual tax rate is primarily due to changes in the geographic mix of profits.
During 3Q16, retail new business volume was US$2.69 billion, a decrease of US$161 million, or 6%, from 3Q15. The decrease was related to lower volume, primarily in North America.
At the end of 3Q16, past dues were 2.77%, compared with 2.68% at the end of 3Q15. Write-offs, net of recoveries, were US$29 million for 3Q16, compared with US$69 million for 3Q15. The decrease in write-offs, net of recoveries, was due to the absence of large write-offs that occurred in 3Q15 in the mining and marine portfolios.
As of 30 September 2016, the allowance for credit losses totalled US$346 million, or 1.28% of net finance receivables, compared with US$348 million, or 1.26% of net finance receivables at 30 September 2015. The allowance for credit losses at year-end 2015 was US$338 million, or 1.22% of net finance receivables.
"Cat Financial's portfolio continues to perform well despite challenging market conditions in some of our key segments. We believe customer risk exposure is well managed, with a broad distribution of portfolio exposure across our global customer base," said Kent Adams, president of Cat Financial and vice president with responsibility for the Financial Products Division of Caterpillar Inc. "Cat Financial remains well positioned to serve Caterpillar customers and dealers worldwide through financial services excellence."
Read the article online at: https://www.worldcement.com/the-americas/27102016/cat-financial-announces-results/