Caterpillar profit up better-than-expected 34 percent

Tag : and mining equipment
Construction and mining equipment companyCaterpillar Inc (CAT.N: Quote , Profile , Research , Stock Buzz ) said on Tuesday quarterly earnings rose a greater-than-expected34 percent as strong growth in emerging economies offset weaknessin North America, Western Europe and Japan.
The company also raised its full-year outlook, despite what itwarned would be significantly higher material costs in the secondhalf, sending its shares modestly higher in premarket electronictrading.
Caterpillar, a component of the Dow Jones industrial average and aU.S. business bellwether, reported a second-quarter profit of $1.11billion, or $1.74 a share, compared with $823 million, or $1.24 ashare, a year earlier.
Sales rose 20 percent to $13.64 billion.
Analysts, on average, expected the Peoria, Illinois-based companyto earn $1.54 a share on sales of $11.87 billion, according toReuters Estimates.
"Never in my 35 plus years with the company have I seen Caterpillardo so well in the face of such a difficult economic climate in theUnited States," Jim Owens, the company's chairman and chiefexecutive, said in a statement.
In North America, Caterpillar said economic conditions inconstruction and quarrying continued to deteriorate during thequarter, offsetting some improvements in commodity sectors. Itcharacterized the downturn in U.S. housing as "the worstenvironment since the 1930s."
The softness spread to nonresidential construction during thequarter as "banks tightened lending standards for commercial andindustrial loans, property prices softened and vacancy ratesincreased," Caterpillar said.
But strength in Asia, where machinery sales surged 50 percentduring the quarter, more than offset weakness there and in WesternEurope.