Cat Financial Reports $736MM in Revenue for Q1/2019
APR 25, 2019 - 6:55 am
Cat Financial reported first-quarter 2019 revenues of $736 million, an increase of $46 million, or 7%, compared with the first quarter of 2018. First-quarter 2019 profit was $98 million, a $7 million, or 8%, increase from the first quarter of 2018.
The increase in revenues was primarily due to a $33 million favorable impact from higher average financing rates and a $19 million favorable impact from higher average earning assets, partially offset by an $8 million unfavorable impact from returned or repossessed equipment.
Profit before income taxes was $142 million for the first quarter of 2019, compared with $124 million for the first quarter of 2018. The increase was primarily due to a $14 million increase in net yield on average earning assets, a $14 million decrease in provision for credit losses and an $8 million favorable impact from higher average earning assets. These favorable impacts were partially offset by a $9 million increase in general, operating and administrative expenses and an $8 million unfavorable impact from returned or repossessed equipment.
The provision for income taxes reflects an estimated annual tax rate of 27% in the first quarter of 2019, compared with 23% in the first quarter of 2018. The increase in the estimated annual tax rate is primarily due to changes in the geographic mix of profits.
During the first quarter of 2019, retail new business volume was $2.35 billion, a decrease of $190 million, or 7%, from the first quarter of 2018. The decrease was primarily driven by lower volume in North America and Asia/Pacific.
At the end of the first quarter of 2019, past dues were 3.61%, compared with 3.17% at the end of the first quarter of 2018. The increase in past dues was primarily driven by Cat Power Finance, concentrated in the marine portfolio. Write-offs, net of recoveries, were $30 million for the first quarter of both 2019 and 2018.
As of March 31, 2019, the allowance for credit losses totaled $534 million, or 1.89% of finance receivables, compared with $511 million, or 1.80% of finance receivables at December 31, 2018.
“Our portfolio and business performed well despite some remaining challenges in the Cat Power Finance portfolio,” said Dave Walton, president of Cat Financial and vice president of the Financial Products Division of Caterpillar. “With relentless focus on expanding our ability to serve customers globally through financial services solutions, we remain well-positioned to serve the needs of Caterpillar, Cat dealers and our growing customer base worldwide.”
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