Caterpillar CEO Says Trade War with China is not "New" for the Company


 
 
10:33 06/23/2019











Caterpillar CAT  CEO Jim Umpleby, sat down last week with Jim Cramer, the host of 'Mad Money' and remarked on the trade war with China.



Umpleby stated, We’ve navigated trade tensions in our 94-year history, this is not new for us.'



He continued, 'We’re very comfortable still meeting our forecast dealing with those challenges so again it’s a part of what we do.'



'The Caterpillar team improved operating margin from 11% in 2014 to 16% in 2018 in just 4 years,' he added.



According to Umpleby, business “continues to be strong” despite an ongoing trade dispute between the U.S. and China with tariffs levied on both sides.



“We saw a big increase there in 2017, 2018, and it’s continuing in 2019 so far,” he explained. “We’re very comfortable still meeting our forecast dealing with those challenges, so, again, it’s a part of what we do. We’ve seen this before, we’ve been through it, we’ll manage our way through this situation.”



Umpleby also said that the company's management has focused on improving operating margins and building its services business, he said.



According to the CEO, Caterpillar has bested its 2014 margins in 2018 and produced $55 billion worth of sales each year.



“The Caterpillar team improved operating margin from 11% in 2014 to 16% in 2018 in just 4 years,” he commented. “Last year we achieved record earnings per share at that $55 billion sales level that was 17% below what we had in 2012 at $66 billion [sales].”



The company wants to double the $14 billion in service revenue it produced in 2016 in the next ten years.



“We’re going for 1 million connected assets by the end of the year,” Umpleby stated. “And services is ... everything that we do with a customer after we sell a new piece of equipment, and we’re working closely with our dealers to find more ways to add customer value through services.”





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