Caterpillar masters slowdown, posts record results
By John D. Stoll
(Reuters) - Caterpillar Inc muscled through murky economic conditions with a surprising 44 percent jump in quarterly profit, and forecast strong demand through next year in a sign of optimism for the global economy.
The company said on Monday that it expects full-year 2011 profit and revenue to set records on the back of surging sales for mining equipment and construction machinery in most markets around the world -- suggesting the underlying health of the global economy may not be as dire as is widely believed.
Caterpillar executives expect that momentum to carry into next year, with sales rising up to 20 percent above the expected record $58 billion in sales in this year.
"We're having a great year in 2011, and 2012 is shaping up to be better," said Caterpillar Chairman and Chief Executive Officer Doug Oberhelman.
Stronger demand at the world's largest heavy machinery manufacturer means more jobs and investment. Caterpillar said it hired nearly 5,000 people in the quarter.
The company typically breaks out its employment figures on a year-over-year basis, but this time it detailed the improvement from second quarter to third quarter. The comparison showed that Caterpillar is coupling earnings growth with a steady commitment to hiring.
"To the degree that we see continuing increases in demand for our products, it will lead to additional hiring," Chief Financial Officer Ed Rapp said in an interview. Caterpillar's production should continue to rise in the months to come.
The bullish news from the world's largest heavy machinery manufacturer, which follows strong forecasts from the likes of General Electric Co and United Technologies Corp, helped spark an overall rally in the market Monday. The stock gained about 5.5 percent, or $4.77, to $92.16 on the New York Stock Exchange, and accounted for a third of the 125-point gain seen Monday in the Dow Jones industrial average. Continued...