Caterpillar Financial Services Corporation
3Q 2018 Earnings Release
FOR IMMEDIATE RELEASE
Cat Financial Announces Third-Quarter 2018 Results
Cat Financial reported third-quarter 2018 revenues of $735 million, an increase of $62 million, or 9 percent, compared with the third quarter of 2017. Third-quarter 2018 profit was $125 million, a $39 million, or 45 percent, increase from the third quarter of 2017.
The increase in revenues was due to a $33 million favorable impact from higher average financing rates, a $27 million favorable impact from higher average earning assets and a $13 million favorable impact from returned or repossessed equipment. These favorable impacts were partially offset by a $14 million unfavorable impact from lower lending activity with Caterpillar.
Profit before income taxes was $163 million for the third quarter of 2018, compared with $126 million for the third quarter of 2017. The increase was primarily due to a $13 million favorable impact from returned or repossessed equipment, a $12 million favorable impact from higher average earning assets and an $11 million increase in net yield on average earning assets primarily due to changes in portfolio mix.
The provision for income taxes reflects an estimated annual tax rate of 24 percent in the third quarter of 2018, compared with 30 percent in the third quarter of 2017. The decrease in the estimated annual tax rate is primarily due to the reduction in the U.S. corporate tax rate beginning January 1, 2018, along with changes in the geographic mix of profits. In addition, a one-time only tax benefit of $7 million was recorded in the third quarter of 2018 for the write-down of net deferred tax liabilities resulting from the 2017 tax year return to provision adjustments. The write-down reflects the reduction in the U.S. corporate tax rate from 35 percent to 21 percent beginning January 1, 2018.
During the third quarter of 2018, retail new business volume was $2.88 billion, an increase of $101 million, or 4 percent, from the third quarter of 2017. The increase was primarily driven by higher volume in Europe, partially offset by a decrease in Mining.
The following information was filed by Caterpillar Financial Services Corp on Tuesday, October 23, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.