Caterpillar Grows Wings

While more and more Americans have been walking away from their homes as the falling home prices mean that 1 in 5 will owe more on their home loans than what their home is worth, a construction boom in Russia, Africa and the Middle East has boosted Caterpillar’s [[cat]] profit. Caterpillar, the world’s largest maker of construction and mining equipment, reported an 18% increase in sales to $11.8 billion and a 13% profit increase to $922 million, or $1.45 per share, from $816 million, or $1.23 per share, a year earlier. This is above analysts’ expectations of $1.33 per share.

The overall results may have been slightly skewed as some of the earnings came from a $60 million profit from the sale of its investment in ASV. This added an estimated 8 cents per-share to Caterpillar’s earnings. Another interesting thing to note is that unlike fellow Dow component General Electric [[ge]], Caterpillar reported a profit despite the current turmoil in the financial markets.

Caterpillar is optimistic about the future despite forecasting a continuing weakening of sales in US markets; it forecast another record year with a 5-10% sales increase and. a 5-15% profit increase. Investors are also optimistic pushing shares up by over 4%. This will all depend on the international markets and if they remain strong they will probably help pull up internationally diversified US companies such as Caterpillar.

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