ST. LOUIS (AP) — Heavy equipment maker Caterpillar Inc. said Friday its first-quarter profit soared more than five-fold as a growing economic recovery boosted demand for the company’s mining and construction equipment.
The results blew past analysts’ expectations and it boosted its outlook for the year. Its shares rose $3.06, or 2.7 percent, to $115.70 in morning trading.
Caterpillar’s earnings are a bellwether for the global economy, as it sells the kind of kind of expensive, heavy machinery used for construction, mining and logging.
Its first-quarter profits reflect an industrial sector that is growing again, with most of its sales growth coming from the sale of big machines.
The Peoria, Ill., based company said its net income climbed to a record $1.23 billion, or $1.84 per share, for the quarter ended March 31. That’s up from $233 million, or 36 cents per share, a year ago. Revenue rose 57 percent to $12.95 billion from $7.55 billion a year ago.
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 $12.29 billion from $7.55 billion during the same period last year.
“We expect that the pace of world economic growth will support continued recovery in the key industries we serve,” CEO Doug Oberhelman said in a statement.
Based on its higher-than-expected sales, Caterpillar boosted its 2011 outlook, forecasting revenue between $52 to $54 billion and net income between $6.25 and $6.75 per share. It previously forecast revenue above $50 billion and net income of roughly $6 per share. The company said its projection does not include its recent acquisitions of MWM Holding GmbH or Bucyrus International, Inc. because the deals haven’t closed yet.
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 will likely cost the company $300 million on lost sales and $100 million in lost profit.
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