Caterpillar buoyed by profitable first quarter

Caterpillar reported a pre-tax profit of US$ 233 million for the first quarter of 2010 and has revised its outlook upwards for the year with annual sales expected in the range of US$ 38 billion to US$ 42 billion.

The company reported first quarter sales of US$ 8.2 billion, down -11% on the US$ 9.2 billion recorded for the same period last year. Following a pre-tax loss of -US$ 112 million for the first quarter of 2009, the pre-tax profit recorded this year is attributed to lower manufacturing costs, pricing and the elimination of redundancy costs.

Chairman and CEO Jim Owens said, "Economic conditions are definitely improving, particularly in the world's developing economies. Industry activity and orders are significantly higher than last year and are at record levels in some areas.

"As a result we are ramping up production to meet increasing demand from customers," he said.

Sales of Caterpillar machinery in the first quarter fell just -1% to US$ 5.2 billion, down from US$ 5.3 billion last year, while sales of engines fell -28% to US$ 2.2 billion, down from US$ 3.1 billion 12 months ago.

While equipment sales in North America and Europe and the Middle East (EAME) decreased by -15% and -22% respectively, sales in Latin America rose +7% to US$ 741 million, up from US$ 690 million, and sales in the Asia-Pacific region climbed +40% to US$ 1.6 billion, up from US$ 1.1 billion last year.

"The main driver behind our improved outlook is robust growth in the Asia-Pacific region and Latin America as well as continued improvement in mining and energy demand globally," said Mr owens.

"We are increasing production schedules and expect sales to improve as we move through 2010," he said.