As one of the world’s largest manufacturers of construction and mining equipment, Caterpillar?s results are watched closely because they are considered an indicator of industrial activity and the health of the US and global economies.
The biggest sales improvement came in North America, where sales grew 31 per cent as construction firms upgraded their aging fleets even though construction activity remained slow.
Sales in Asia grew 25 per cent due to increases in Australia and other countries that offset a decline in China.
Caterpillar CEO Doug Oberhelman said the company was prepared to cut costs if the US economy weakens significantly, but he remained cautiously optimistic, despite widespread fears of a slowing global economy.
“The good news is, this doesn’t feel like 2008. Interest rates are low, central banks are prepared to inject more liquidity if needed, and housing is coming off lows, not a peak, and seems to be improving,” Oberhelman said.
Caterpillar reported $US1.7 billion ($A1.67 billion) in net income from April through June. That’s up from $US1.02 billion ($A1.14 billion) a year ago.
Revenue increased 22 per cent to $US17.37 billion ($A16.57 billion) from last year’s $US14.23 billion ($A13.57 billion).
Caterpillar tightened its revenue forecast for the year to between $US68 billion ($A64.90 billion) and $US70 billion ($A66.8 billion) from a previous prediction of between $US68 billion ($A64.90 billion) and $US72 billion ($A68.72 billion). Analysts expect $US69.44 billion ($A66.28 billion).
Caterpillar’s higher quarterly sales volume and prices provided a $US2 billion ($1.90 billion) boost, with sales rising in every region worldwide. Last year’s acquisitions of mining equipment maker Bucyrus International and engine maker MWM Holding also provided a $US1.37 billion ($1.30 billion) boost to sales during the quarter.
Sources: The Business Spectator, The Washington Post