On Mar 22,
) won a 5-year contract worth $633 million from the Department of
Defense to supply equipments to the U.S. military.
The fixed-price contract with economic-price-adjustment for
the supply of material handling equipment will commence from
fiscal 2013 through Mar 21, 2018. As per the contract,
Caterpillar will supply the equipment to the U.S. Army, Navy, Air
Force, Marine Corps, and federal civilian agencies. The locations
specified in the contract are - Ill, Pa, Belgium, Japan, Germany,
Amongst the other contract awards by the Department of Defense
on the same date,
Lockheed Martin Corporation
) was awarded a $27.4 million extension to previously awarded
contract to exercise and restructure the
fixed-price-incentive-options for the Surface Electronic Warfare
) Armament and Technical Products division was awarded a $7
million contract to supply 19 M61A2 20mm Lightweight Gatling Gun
Systems for installation on F/A-18 E/F fighter aircraft.
ManTech International Corporation
) also won a $15.3 million contract for systems engineering and
integration support for the Space and Missile Systems, Launch and
Range Systems directorate.
In May last year, Caterpillar was awarded a fixed-price with
economic price adjustment contract valued at $776 million for
supplying commercial type construction equipment by the Defense
Logistics Agency. The contract is scheduled to be completed by
May 23, 2017.
At the end of the fourth quarter, Caterpillar's backlog was
$19.6 billion, a 15% sequential and 34% annual decline. The most
significant decline was noted in the Resource Industries.
Although dealer deliveries to end users in the fourth quarter of
2012 remained flat sequentially, orders received from Cat dealers
have continued to be well below the end-user demand. Caterpillar
will need additional orders during the year to meets its
Caterpillar's fourth quarter results were also disappointing
with revenues declining 7% to $16.1 billion due to the impact of
changes in dealer new machine inventories - the first quarterly
revenue drop since the March 2010 quarter. Among the regions,
sales growth in Latin America was the only saving grace.
Caterpillar's worldwide sales declined 13% for the three months
ending Feb 2013, the third consecutive month of declining sales,
worsening from the 4% and 1% dip reported in Jan 2013 and Dec
Caterpillar sales started its downhill journey in Dec 2012,
hurt by tougher year-earlier comparisons and rising inventories
of unsold equipment. Caterpillar had earlier witnessed negative
sales growth in Apr 2010 and since then enjoyed a stint of
positive growth, benefiting from strong equipment demand both
domestically as well as in the emerging markets.
Caterpillar remains affected by slowing demand and inventory
correction as a result of overproduction compared to demand.
Caterpillar is struggling to bring production under control.
Even though Caterpillar will benefit from the recovery in the
U.S. construction sector, the recent loss of sales momentum,
declining backlog, negative impact of the European debt crisis
and a slowing Chinese economy remain concerns. Caterpillar
currently retains a Zacks Rank #3 (Hold).
CATERPILLAR INC (CAT): Free Stock Analysis
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