This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Caterpillar's 1Q Profit Soars, Boosts Forecast

CHRISTOPHER LEONARD

ST. LOUIS (AP) â¿¿ Heavy equipment maker Caterpillar Inc. said Friday its first-quarter profit soared more than five-fold and raised its financial outlook for the year as a growing economic recovery boosted demand for its mining and construction equipment.

The results blew past analysts' expectations and its shares rose $2.72, or 2.4 percent, to $115.36 in midday 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 profit reflects 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, boosting Caterpillar's sales, DeWalt said. That means spending will likely continue as companies replace more vehicles and even expand on growing demand.

"Let's be clear: This is not some kind of bubble," DeWalt said. "We believe (companies are) essentially buying enough to keep their fleets from continuing to degrade."

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 $8.24 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.

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.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 18,094.72 -108.65 -0.60%
S&P 500 2,097.39 -10.39 -0.49%
NASDAQ 4,965.3290 -14.5720 -0.29%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs