Andrew R. Bonfield
Thank detailed of you, comments on our of Then Jim, segments. good I'll the everyone. quarter and more quarter. with provide begin high-level summary including the performance a I'll results, second the morning,
then the remainder free for balance the cash flow of and discuss our with conclude comments I'll year. the assumptions sheet Next, on and
Beginning on Slide X.
we both Although in anticipated. higher operating than adjusted and profit slightly sales including had share, which our the profit were per performance expectations, operating had margin quarter, adjusted record were stronger strong revenues below of we
and increase Adjusted adjusted billion. Sales about the basis XX.X%, billion points $XX.X an year. operating by to year. X% decreased operating X% to the the was profit by prior compared XXX profit margin of increased of revenues And $X.X prior versus
Profit quarter on compared excluded $X.XX the to $X.XX the last entities. both X% compared in This year. was second quarter per to of of share per loss increased in share Adjusted the Adjusted a $X.XX share which $X.XX $X.XX of of year. profit second to the quarter costs last per by per per to $X.XX divestiture X a in share XXXX. the of $X.XX [indiscernible] share restructuring second costs benefit in mainly discrete due and per compares were quarter to of non-U.S. tax deferred excluded profit share,
million XXXX. million XX% $XX excluding taxes discrete and second favorable income prior in commodity primarily $XXX the XX.X% a the for reflected items, in provision rate of from The benefit was of a tax effective versus compared impacts income global quarter, for the by Other with quarter of driven year quarter hedges. the annual was second
$X.XX. per year-over-year of impact past profit average primarily favorable a share share year number had of due in outstanding the to on the repurchases the impact over approximately the adjusted Finally, reduction from shares
Moving driven on impact was compared second favorable decreased from to Lower to price by line by X. dealer as in prior the quarter. changes our inventories. X% offset year the mainly results I'll and realization. volume Slide Sales partially by the revenues volume was discuss top lower the in
As for last made you of inventory a may quarter comparison. a quarter an recall, this sales atypical increase decline in we challenging year as the anticipated second dealer versus XXXX
To comparison, last $XXX decreased by the inventory quarter. of an million of explain, increase year. in we the dealer second $XXX quarter In saw million about same in
second geographic million were below $XXX typical seasonal including as Sales partially by due our trend quarter slightly decrease For in to million the of of the a machines $XXX year. being realization, last quarter compared inventory offset to dealer expectations with lower-than-expected increase mix. volume followed a better-than-expected this only, price
included profit billion. to higher Moving XX. costs. Slide restructuring profit profit X% unfavorable increased This Adjusted in $X.X from million operating operating X% second to $XXX billion. quarter by by Operating to on $X.X impact decreased a the
quarter price. a and the mainly points expected due better while of product our slightly Versus better driven by lower costs, benefited partial we as by impact sales manufacturing margin of Price & we year. to the Energy The than Margins favorable realization Transportation. the than expectation, acted were offset. operating mix was price anticipated adjusted versus XX.X% profit profit XXX volume prior improved basis
Slide volume, quarter is second in price an decreased second last year. the dealer by sales inventories. Sales to This On due in partially XXXX inventory quarter in $X.X in of the XX, by Dealer flat primarily by favorable offset impacted volume billion. was Industries Construction increase to second X% realization. of unfavorable the lower sales versus was about changes quarter
Europe. users also and were lower to in North had volume. in lower-than-expected anticipated continued impacted sales Sales due rental Construction Industries weakness loading than to Lower in we America fleet
in about XX%. EAME and the by declined region decreased Sales in flat, sales In Latin by By America increased were sales by sales region, North Asia/Pacific, XX%. America XX%.
This partially mainly provided lower which year. profit Industries decrease volume, benefited from Second well, as billion, tailwind offset some costs. mix for realization, effects. price lower prior Favorable the by manufacturing geographic reflecting X% Construction $X.X was to due costs largely sales quarter favorable a material was versus
segment's XX.X% was due last The of and favorable mix Price with points planned to spend. expectations. line of year. a increase in of product our XX an margin basis was was SG&A the expected had timing primarily than versus we and R&D better Margin
last in of realization. changes to inventory inventories The line second partially was second in impacted due the Industries the Slide XX. offset our XX% dealer by about sales in with XXXX Turning Sales dealer lower more Resource expectations. which billion, quarter quarter than $X.X decline of by was price sales year. during favorable the during to decreased volume was quarter volume, decreased to second as by primarily
In saw given the anticipated, users to comparison. addition, in sales we lower challenging segment as the
profit and lower million. price including impacts by $XXX volume, the quarter offset to freight. Second costs, for Industries year mainly prior versus realization is to due lower favorable X% This Resource by partially decreased manufacturing sales from
the last increase SG&A XXX points planned spend driven an and The expected R&D and product basis segment's was margin timing Margin had of mix. mainly of better by we XX.X% was versus year. than favorable a of
driven by line second which Now on than The offset sales X% in increased by quarter our Slide by due XX. Energy sales were favorable by price Segment primarily volume sales was industrial, to increase realization, billion. was price. we driven lower & which slightly in Transportation better anticipated with to partially $X.X the expectations. declined had
by by increased gas and By by XX%. sales sales application, power X%, decreased Transportation Oil industrial while were generation by higher sales XX%. X%. sales improved
for profit XX% Transportation quarter by prior $X.X Energy due billion. Second primarily the versus to & favorable to increased year The increase was price.
an versus increase and margin due better anticipated freight favorable was segment's was material year. lower-than-expected points manufacturing we had largely lower than prior lower The costs, to absorption, XX.X% which stronger of XXX the reflected of inventory costs. Margin basis and price significantly
average financing to Financial XX. due Products increased and about regions Moving in by to all primarily $X X% higher higher Slide to average revenues billion America. earning across rates North assets
a higher from mainly $XXX reflected absence of Segment prior due a release to the by provision nonrecurring was the losses, which million. largely to reserve year. for decreased This X% profit credit
as the reflect healthy basis improvement a past near historic X.XX% compared year. point XX and prior remains dues portfolio on The to of lows
the allowance our rate In was record. rate addition, on X.XX%, lowest
Business activity volume America. driven increased healthy year as remains versus prior by new the North business primarily
for levels. close We also healthy -- low where demand used historical continue to remain inventory to equipment inventories see when
our ME&T in between free $XX cash in generated flow the Slide of we target billion billion billion. on year second half be of $X.X $X.X cash We the Moving to annual range full to to top our in quarter. And XX. expect free flow
CapEx for remain $X year. billion between billion Our for the expectations $X.X and
deployed repurchase to Approximately than agreement. those delivered agreement the prior of $X a were On the terminated share company with billion repurchases, quarter shares billion share delivered second year-end. in is the upfront to XX% accelerated included balance more the $X.X the be to when
new also we of maturity our And that not liquidity in second did position, ME&T bonds. Note bond quarter. issue the $X we an given had healthy billion
of strong with remains Our balance balance enterprise $X.X sheet cash an billion.
hold on improve that longer-dated slightly liquid we in marketable billion addition, securities In to yields $X.X cash.
the and Slides our show the XX, remainder I high-level on assumptions for of year. Now XX will
assumption revenues similar we change This mentioned, sales. previous reflects now record anticipate sales expectation this to mainly sales compares our in inventory, level. the Industries lower-than-expected This a dealer Jim machine Construction updated in be slightly XXXX rental broadly primarily due Resource to an loading of year Industries versus fleet lower to in reduction and As slight users lower America. and North to for in
second trend seasonable assumptions. in second the compared our follow half sales specific to the normal that see as higher first, sales this Now we to typically and expect year. half to We
in now by users. compared driven anticipate sales to we lower sales second slightly As the year, prior half machine the lower to
Changes decrease the be the decrease billion. inventories was and dealer the nominal expected half in have second the of machines to of a to second which should in in are observed half $X impact similar year this as XXXX, about
that quarters quarter However, will in third their inventory a due inventories and note impact in quarter fourth smaller headwind dealer year. the sales as differently built machine XXXX as of third inventory dealers we sales the the expect than in to tailwind decline a the changes prior the quarter a
achieve as growth of Finally, half the to services services anticipate revenues. we in strive the of billion XXXX $XX continue year in our we to target second
to expectations. our margin on Moving
expectations of the for above be margin target performance overall first Jim the the year. the adjusted mean that of with now for full more combined range our strength to top As profit mentioned, second half the the favorable operating anticipate we end half
the margins higher half, sales, typical a which to second we half margins, seasonal Specific follows trend. lower despite first expect do versus
is decline half may in magnitude that at be the levels, were slightly record half first keep margins mind than larger second of typical. However, the and
expect level. in prior to second will the margin to year, profit we the the operating our year compared half prior be As similar adjusted
operational ago. costs improved we lower from the in anticipate do in slightly on some second volumes a and we slight headwind versus year favorability While half expect efficiencies, price a manufacturing
On second the in of price, half increases be in of taken lapping the the year lower. significantly benefit the second half the will impact means this of that XXXX
that we improved result environment. addition, the In normalization across in will expect the industry the pricing of availability
for To effective excluding please restructuring assist for that $XXX XX.X%. of at remains rate, you with around items, anticipate full the costs expectations the million we annual discrete your and tax note that our year, modeling
top Now on few the third Slide on XX. the starting I'll a on provide comments line. quarter,
revenues sales dealer the We expect which for impact and compared slightly lower we year headwind machines, inventory the will to as anticipate quarter prior in third volumes.
dealer We be lower the flattish slightly in which typical, compares quarter atypical expect inventory to to the is to year. prior machines as the increase $XXX million third in
to We versus also sales comparison. users a anticipate lower strong machine
We that to the a I flattish normalization due moment in realization quarter price the ago. expect the versus third year prior mentioned
We will positively third of ongoing also service our anticipate initiatives impact in the sales benefit the quarter.
anticipate segment have primarily sales compared a of lower Industries, expect the quarter in due that third to sales which inventories. prior Construction By the comparison headwind in as are challenging to to year. we from first users changes observed impacted quarters in we this sales in we year, a similar X to dealer Resource by Industries lower In the
and as anticipate prior sales & a Energy offset. transportation. Lower year, strengthen we generation, power oil should supported by the industrial higher gas act in Transportation, in partial In versus and sales
lower offset be margins adjusted manufacturing by prior the enterprise costs. operating quarter, the anticipate in margin to we volume expect third as primarily profit For year will compared we similar favorable
partial we slightly Construction compared manufacturing quarter, act third should in By margin Favorable offset. and anticipate lower as segment to volume price lower on realization. prior costs in year a unfavorable the Industries, the
and margins to third stronger Resource due the higher the compared and a favorable Energy higher realization. R&D expect year slightly the volumes & and we we lower For unfavorable to Transportation, volume spend. margin price In year in quarter prior versus Industries, SG&A and prior anticipate
of sales Strong led a share adjusted of So operating margin record the summarize. turning to revenues in performance profit to per adjusted $X.XX. Slide XX, execution decrease continued profit second and let and quarter. XX.X% Higher me in and offset the operating
of compared expectation sales for share what We full the levels for on now slightly lower adjusted the to leads above profit in we net which profit beginning year. target should based profit adjusted range overall be end expect our The levels, be year of margin now XXXX. and as current to of than factors the adjusted top per the these operating to expected our contemplated operating at higher the
billion cash the free ME&T $X.X in generation was flow quarter.
expect to our range the of to target in be continue full for half We year. the top
dividends We in have shareholders of $X.X to deployed billion through half first repurchases and share the XXXX.
strategy execute to continue growth. our long-term profitable We for
And your we'll that, take questions. with
