Caterpillar has agreed to buy back $1.5bn of its shares from Citibank in an accelerated stock-repurchase transaction, bringing the total buyback this year to $2bn.
Last week, Caterpillar reported its second-quarter profits fell by 29% amid “severely depressed” demand for mining equipment, alongside lacklustre performance in construction and oil exploration.
However, the company has also left its profit forecast for the full year unchanged and said cost cuts have allowed it to keep its balance sheet strong enough to buy back more shares and raise dividends.
In all, the company has now repurchased about $3bn of its shares under a $10bn stock-buyback plan authorised in January 2014, and which is set to expire at the end of 2018.
Meanwhile, in an effort to boost truck sales, Caterpillar will begin assembling its own dump trucks in Victoria, Texas – taking over the process from long-time partner Navistar in the first half of next year.
Bringing the truck family into Caterpillar is expected to add roughly 200 jobs at the Texas plant, which opened in 2012 to assemble excavators that had been built in Japan and imported to North America.
The Caterpillar-Navistar partnership was devised in 2009 to market Caterpillar-branded trucks to overseas markets, but sales of the trucks have averaged 1,000 units annually for the past three years.
