Fueled by growth in the global mining sector as well as the need for U.S. construction firms to replace used equipment, Caterpillar posted a 29-percent first-quarter profit and boosted its outlook for the year.
The company generated $1.59 billion net income, or $2.37 per share, during the quarter. That’s up from last year’s $1.23 billion net income, or $1.84 per share.
Caterpillar, the largest mining and construction equipment makers in the world, said its revenue grew 23 percent to $15.98 billion from last year’s $12.95 billion.
Caterpillar Inc. said it now expects to generate earnings per share of $9.50 in 2012. That’s up from a previous prediction of $9.25, but Caterpillar did not increase its revenue forecast.
While the company beat most expectations easily, revenue came in a little short.
On average, the analysts surveyed by FactSet expected quarterly earnings per share of $2.13 on revenue of $16.18 billion.
And some unsettling data on durable goods sales may have put a damper on Caterpillar shares as well.
The Commerce Department reported that orders for long-lasting factory goods fell by the largest amount in three years last month, the Associated Press reported.
While that was mostly because demand for commercial aircraft fell, companies ordered less machinery, and that could be a sign that manufacturing output may slow.
Caterpillar’s results are watched closely because they are considered an indicator of industrial activity and the health of the overall economy.
Caterpillar said last year’s acquisitions of mining equipment maker Bucyrus International and engine maker MWM Holding GmbH provided a $1.1 billion boost to sales during the quarter. That helped offset decreased demand for construction equipment in China and Brazil.
“We’re seeing strong global demand for most mining products and significant growth in replacement demand for products in the United States, which more than offset slowing in China and Brazil,” Caterpillar chairman and chief executive officer Doug Oberhelman said.
Caterpillar officials said they expect the global economy will continue to improve and average 3 percent growth in 2012. The U.S. economy will likely see similar growth levels, but Caterpillar said much of Europe will see little or no economic growth this year.
In China, economic growth may have slowed because of the government's efforts to control inflation, but Caterpillar still predicts 8.5 percent growth there in 2012.