Cat Financial reported Q3/16 revenues of $651 million, a decrease of $2 million compared with Q3/15. Q3/16 profit was $97 million, an 11% decrease from Q3/15.
The slight decrease in revenues includes a $10 million unfavorable impact from returned or repossessed equipment and a $9 million unfavorable impact from lower average earning assets, offset by a $19 million favorable impact from higher average financing rates.
Profit before income taxes was $146 million for Q3/16, compared with $153 million for Q3/15. The decrease was primarily due to a $10 million unfavorable impact from returned or repossessed equipment and a $7 million increase in provision for credit losses, partially offset by a $7 million decrease in general, operating and administrative expenses.
During the quarter, retail new business volume was $2.69 billion, a decrease of 6% from Q3/15. The decrease was related to lower volume, primarily in North America.
At the end of Q3/16, past dues were 2.77%, compared with 2.68% at the end of Q3/15. Write-offs, net of recoveries, were $29 million for quarter, compared with $69 million for the same quarter a year ago. The decrease in write-offs, net of recoveries, was due to the absence of large write-offs that occurred in Q3/15 in the mining and marine portfolios.
As of September 30, 2016, the allowance for credit losses totaled $346 million, or 1.28% of net finance receivables, compared with $348 million, or 1.26% of net finance receivables at September 30, 2015. The allowance for credit losses at year-end 2015 was $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. “Cat Financial remains well positioned to serve Caterpillar customers and dealers worldwide through financial services excellence.”
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