* Posts Q1 cont ops EPS of 50 cents/shr vs 39 cents view
* Raises full-year sales, EPS outlook
* Says 'economic conditions are definitely improving'
* Cites especially strong growth in Asia, Latin America
* Share up nearly 3 pct in premarket trading
(Adds analyst comment, details on results, byline)
By James B. Kelleher
CHICAGO, April 26 (Reuters) - Caterpillar Inc (CAT.N) reported a stronger-than-expected quarterly profit on Monday and raised its full-year forecast, saying economic conditions were improving, especially in Asia and Latin America.
The world's largest maker of earth-moving equipment, whose shares rose 3 percent in premarket trading, sees particularly strong overseas orders from mining and energy companies.
It said it has firm orders for a significant percentage of its available 2010 production of large mining trucks and large track-type tractors.
But the company cut its outlook for 2010 U.S. housing starts by 20 percent -- from 1 million to 800,000 -- saying the weak labor market was "the major reason many remain pessimistic about the U.S. economy."
"The volume is beginning to come back," said Longbow Securities analyst Eli Lustgarten. "But it's all outside the United States."
The Peoria, Illinois-based company reported a first-quarter profit of $233 million, or 36 cents a share. During the comparable period last year, Caterpillar reported a net loss of $112 million, or 19 cents a share.
Sales, including revenue from its financial service arm, fell 11 percent to $8.23 billion.
Stripping out one-time charges, including tax expenses of $90 million related to the recently signed U.S. health care legislation, the company reported a profit of 50 cents a share.
On that basis, analysts, on average, expected Caterpillar to report a profit of 39 cents a share on sales of $8.84 billion, according to Thomson Reuters I/B/E/S.
Caterpillar also expects a full-year profit in the range of $2.50 to $3.25 a share on sales in the range of $38 billion to $42 billion. Analysts, on average, expected the company to report a profit of $2.69 a share on sales of $37 billion, according to Thomson Reuters I/B/E/S. (Reporting by James B. Kelleher, editing by Dave Zimmerman and Derek Caney)