“Overall end-user demand is similar to our previous outlook, but we now expect a more significant reduction in dealer machine inventory. That’s the main reason for the reduction in the sales and revenues outlook," said Oberhelman. "During the second quarter, dealers increased their utilization of inventory from our product distribution centers, which allows them to meet customer demand with less inventory.
"With the sharp reduction in dealer inventory and the decline in mining, 2013 is turning out to be a tough year and we've already taken action to reduce costs," he continued. "During the first half of the year, we've had temporary factory shutdowns, rolling layoffs throughout much of the company, reductions in our flexible workforce, and we've reduced discretionary and program costs. While we've taken significant action already, we will be taking additional cost reduction measures in the second half of 2013."
In February 2007, the Board of Directors authorized the repurchase of $7.5 billion of Caterpillar stock, and in December 2011, the authorization was extended through December 2015. In April of this year, Caterpilar announced its intention to repurchase approximately $1 billion of stock, which was completed in June. Through the end of the second quarter of 2013, $4.8 billion of the $7.5 billion authorization was spent, leaving $2.7 billion in the authorization. Given the strength of its balance sheet and strong cash flow, the company expects to repurchase an additional $1 billion of stock in the third quarter of 2013.
“Repurchasing stock in a downturn is a key part of our cash deployment strategy. The $1 billion we repurchased in the second quarter of 2013, the 15 percent increase in the quarterly dividend we announced in June and the additional $1 billion of stock repurchase that we expect for the third quarter all support our commitment to deliver superior stockholder returns,” Oberhelman said.
Caterpillar worldwide full-time employment was 122,402 at the end of the second quarter, a decrease of 10,423 employees compared with Q2 2012. The flexible workforce decreased 9,633 for a total decrease in the global workforce of 20,056.
The decrease was the result of lower production and divestitures. Divestitures, including the sale of a majority interest in third party logistics business and portions of Bucyrus distribution, decreased the global workforce by 6,572.