Caterpillar profits in Q1 beat analysts expectations
Caterpillar Inc. (NYX:CAT), the world’s largest manufacturer of earthmoving equipment by revenues, showed some optimism on the U.S. economy today, after announcing profits for the first quarter well above Wall Street expectations.
The Peoria-based company reported a 29% rise in profits for Q1 and also raised its full-year profits outlook from US$68 billion to $72 billion based on U.S. construction firms replacing old gear and global demand booming for mining equipment.
Sales and revenues were up 23%, reaching almost $16 billion from last year's approximate $13 billion.
Caterpillar said last year's acquisitions of mining equipment maker Bucyrus International and engine maker MWM Holding GmbH provided a $1.1 billion boost to sales during the quarter. That helped offset decreased demand for construction equipment in China and Brazil.
“We're seeing strong global demand for most mining products and significant growth in replacement demand for products in the United States, which more than offset slowing in China and Brazil,” said Caterpillar Chairman and CEO Doug Oberhelman.
Group President and CFO Ed Rapp said in a webcast that Caterpillar expected the global economy will continue to improve and average 3% growth in 2012.
While the U.S. economy will likely see similar growth levels, the machinery producer said much of Europe will see little or no economic growth this year.
In China, economic growth may have slowed because of the government's efforts to control inflation, but Caterpillar still predicts 8.5% growth there in 2012.
Photo: Group President and CFO, Ed Rapp, discusses Q1 2012 results (webcast).