Caterpillar Q1 Result tops Estimates

Caterpillar Inc. reported better-than-expected earnings in the first quarter, owing to the surge in overseas sale and the weak dollar. Profits in the quarter jumped 13 percent, accounting for the company’s most money-making period ever.

Caterpillar posted earnings of $1.45 a share, up 18 percent from a year ago and neatly beating estimates by 12 cents. Shares of the industrial giant went up 8.5 percent to a nine-month high of 85.28.

First-quarter revenue increased 18 percent to $11.8 billion, driven by the lucrative sales in global markets. International sales accounted for 58 percent of the total, up from the share of 53 percent they constituted a year ago.

According to Caterpillar executives the weak dollar had an overall negative impact on the bottom line, with raw materials and other costs up at its international plants. But in sales alone, the currency impact added $310 million in the quarter.

Caterpillar's strong results in China, India and Russia demonstrated how well exporters can do in the right markets.

"This plays well to our strengths — having a global footprint and global, diversified products," said Chief Financial Officer, Dave Burritt. "Clearly we're seeing international trade as a win-win, and a great opportunity continues."

However, sales in North America were the most sluggish, rising only 4 percent.
In the Asia-Pacific region sales increased by 37 percent, in Europe-Africa-Middle East they were up by 30 percent while Latin America recorded a 24 percent rise in sales.

Caterpillar has always known to fluctuate in proportion to the US economy but surprisingly, this time around, it posted record growth even as economy remains profoundly impaired.

"Even though we're currently weathering a recessionary storm in the U.S.," said Chairman and Chief Executive Jim Owens, "we expect the rest of the world to continue to invest in infrastructure growth well into the next decade."

Shares rose $6.69, or 8.5 percent, to close at $85.28 Friday and were up more than 40 percent since mid-January to within $2 of their all-time high.