Caterpillar raises outlook as profits rise

Caterpillar has raised its revenues estimate for the year, following a steep rise in second-quarter sales and profits. Excluding the revenues from newly acquired mining equipment manufacturer Bucyrus, the company expects revenues this year of US$ 54 billion to US$ 56 billion, compared to the previous estimate of US$ 52 billion to US$ 54 billion. Bucyrus is expected to add another US$ 2 billion to 2011 sales.

Caterpillar's sales in the second quarter of the year came to US$ 14.2 billion, a +37% rise on the same period last year. Revenues for the first half of the year were US$ 27.1 billion - a +46% rise on 2010. The company made a net profit of US$ 1.02 billion in the second quarter, compared to US$ 707 million in Q2 2010. Profits for the first half of the year were US$ 2.24 billion - more than double the US$ 940 million made in the first half of 2010.

Commenting on the results, chairman and CEO Doug Oberhelman said, "Customer demand around the world continues to improve, and our sales and revenues reached an all-time record in the second quarter."

Strongest growth in revenues over the quarter came from the Europe, Africa and Middle East (EAME) region, where sales were up +51% to US$ 3.63 billion. There was also above average growth in the Asia-Pacific region, with a +41% rise to US$ 3.49 billion. Meanwhile, Latin American revenues were up +34% to US$ 2.14 billion and North American sales were up +26% to US$ 4.97 billion.

"Economic activity and our business in Latin America, the Middle East, Africa, CIS and greater Asia are robust. While we expect moderate US economic growth, we believe a lack of confidence in the business climate is the major impediment to a stronger recovery and job creation," said Mr Oberhelman.