Caterpillar announces quarterly results

Caterpillar, the world’s largest maker of earthmoving equipment, expects to make record profits this year, as rising commodity prices fuel a surge in demand for mining equipment and the economy continues to recover both in emerging markets and the US.

The manufacturer said on Thursday it anticipated sales and revenues in 2011 would exceed US$50bn compared with US$42.6bn last year, while net profits would hit a record of “near US$6.00 per share”, up from US$4.15 per share in 2010.

The company said it would allot US$3bn to capital spending this year, with more than half of the spend in the US. “These investments in our future will add cost in the short term, but are essential to be prepared for continued growth as the economic environment improves,” said Doug Oberhelman, chief executive.

Caterpillar made the projections as it unveiled quarterly earnings that easily beat Wall Street’s expectations. The company made a net profit of US$968m or US$1.47 per share in the fourth quarter, up from US$232m or 36 cents per share in the same period a year earlier and above analysts’ average forecasts of US$1.27 per share.

Sales and revenues were US$12.8bn, up from US$7.9bn a year earlier and ahead of Wall Street expectations of US$11.6bn.

The results demonstrate how the boom in commodity prices is feeding into equipment-makers’ performance. Caterpillar’s earnings came after Komatsu, the Japanese heavy-equipment maker that is its main global rival, raised its profits outlook on Thursday and reported that earnings in the three months to the end of December more than tripled from the prior year, on strong demand for construction and mining equipment in China and Indonesia.

Caterpillar said that excluding acquisitions, it had hired back 19,000 workers of the roughly 37,000 positions it cut during the economic downturn. It said 7,500 of the new workers had been hired in the US, representing a 15 per cent increase in its US workforce.