December 6, 2023

Caterpillar Surpasses Earnings Expectations and Raises Its Outlook for the Year

Caterpillar, the heavy equipment maker, said Friday that its first-quarter profit soared more than fivefold. It also raised its financial outlook for the year as a growing economic recovery increased demand for its mining and construction equipment.

The results topped analysts’ expectations, and shares rose $2.77, or 2.46 percent, to $115.41.

Its first-quarter profit reflected an industrial sector that is growing again, with most of its sales growth coming from the sale of big machines. When the recession hit in 2007, construction and mining companies cut back their spending on heavy machinery first, Mike DeWalt, Caterpillar’s director of investors, told analysts Friday.

For more than two years, companies held back their investment. But now they appear to have no choice but to replace aging machinery, raising Caterpillar’s sales, Mr. DeWalt said.

That means spending is likely to continue as companies replace more vehicles and even expand on growing demand.

The company said its net income climbed to $1.23 billion, or $1.84 a share, from $233 million, or 36 cents a share, in the period a year earlier.

Revenue rose 57 percent, to $12.95 billion from $8.24 billion.

Analysts had expected earnings of $1.30 a share on revenue of $11.43 billion.

Revenue at Caterpillar’s machinery and power systems division surged to $12.28 billion from $7.55 billion.

Based on its higher-than-expected sales, Caterpillar raised its 2011 outlook, forecasting revenue of $52 billion to $54 billion and net income of $6.25 to $6.75 a share.

It previously forecast revenue above $50 billion and net income of roughly $6 a share.

Caterpillar said its outlook would have been higher if not for the earthquake and tsunami in Japan, which damaged many of its suppliers. Supply disruptions and delays are likely to cost it $300 million in lost sales and $100 million in lost profit.

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