Caterpillar to Buy Back $1.5 Billion in Shares From Citibank

   By Tess Stynes 
 

Caterpillar Inc. (CAT) said it agreed to repurchase $1.5 billion of its shares from Citibank in an accelerated stock-repurchase transaction.

The Peoria, Ill.-based maker of engines and heavy equipment's chairman and chief executive, Doug Oberhelman, said the stock buyback will bring Caterpillar's share repurchases to about $2 billion this year.

Last week, Caterpillar reported its second-quarter profit fell 29% and said demand for mining equipment remains "severely depressed" while sales of equipment used in construction and oil exploration have also begun falling.

However, the company also left its profit forecast for the full year unchanged and said the cost cuts it already made have allowed it to keep its balance sheet strong enough to buy back more shares and raise dividends.

On Tuesday, Caterpillar said that through the end of the second quarter, the company has repurchased about $3 billion of its shared under a $10 billion stock-buyback plan authorized in January 2014. The buyback plan is set to expire at the end of 2018.

Write to Tess Stynes at [e-mail]

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