Caterpillar 4Q Profit Surges On The Improved Demand; Results Beat

Caterpillar Inc.'s (CAT) fourth-quarter earnings soared as the heavy-machinery maker saw demand recover from the slumping levels a year earlier.

The results beat analysts' expectations, sending shares up 2.8% at $98.45 in premarket trading. The stock through Wednesday's close is up 79% in the past year.

For the new year, the company said it expects earnings near $6 a share and affirmed its October revenue view, while analysts forecast $5.86.

Chairman and Chief Executive Doug Oberhelman said "continued growth in developing countries, improving economies in North America and Europe, strong demand for mining products and the need for our dealers to add to inventories and replenish rental fleets should all contribute to higher sales in 2011. The increases are likely to be mitigated somewhat by small declines in later cycle industries, such as turbines and marine engines."

Strong earnings reports and recent forecasts from several United States. manufacturers suggest an industrial rebound remains robust--which bodes well for equipment makers such as Caterpillar. The company's performance improved sharply last year as construction and mining companies replenished equipment after cutting back in 2009.

Caterpillar embarked on several significant acquisitions last year, including its $7.6 billion deal for mining-equipment company Bucyrus International Inc. (BUCY) in Nov.

Caterpillar reported a profit of $968 million, or $1.47 a share, up from $232 million, or 36 cents a share, a year earlier. The prior year included 5 cents in charges.

The world's largest manufacturer of bulldozers, excavators, wheel loaders and other construction machinery, reported revenue surged 62% to $12.81 billion after tumbling 39% a year earlier.

Analysts polled by Thomson Reuters most recently forecast earnings of $1.27 on revenue of $11.63 billion.

Machinery and engine sales surged 69% after sliding 41% a year earlier.

The company forecast $3 billion in capital expenditures for this year, with more than half earmarked for the United States.


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