Cat Financial saw Europe revenues in the third quarter fall 8% year-on-year to $101m (€88m, £78m), in contrast to double-digit growth in the North American and Asia Pacific markets.
The financial services division of yellow goods manufacturer Caterpillar reported a 9% increase in revenues for the quarter, to $845m, next to a 9% rise in profits to $201m.
Higher financing rates and a favourable impact from returns and repossessions contributed to the increase in revenues, but were partially offset by lower financing rates in the European market.
The unit saw $2.8bn in retail new business volumes, up 4%. Europe was the primary contributor to the increase.
Receivables past due stood at 3.47% of Cat Financial’s total portfolio, up from 2.73% a year earlier. The unit said the increase was primarily driven by Cat Power Finance. Write-offs after recoveries totalled $40m, compared to $47m in Q3 2017.
“We were pleased with the solid results delivered by Cat Financial in the third quarter,” said Dave Walton, president of Cat Financial and Caterpillar vice president with responsibility for financial products.
“We saw improvement quarter over quarter for most key business drivers, and Cat Financial remains well-positioned to serve Caterpillar customers and dealers worldwide through financial services solutions.”
Revenues on the rise but profits lag in year-to-date
For the nine months to September 30, Cat Financial saw a 7% year-on-year revenue increase to $2.1bn, driven by significantly higher new business volumes at $8.9bn, up 15%.
Despite this, profits were lagging behind 2017’s nine-months results. After tax profits attributable to Cat financial were $287m as of September, compared to $315m at the same point in time last year.
For the whole of 2017, the division reported $2.69bn in revenues, up 4%, and pre-tax profits of $590m, up 29%. A lower US corporate tax regime benefitted Cat Financial for $151m over the year, which was partially offset by mandatory repatriation of non-US assets.