BOSTON (Reuters) - Caterpillar Inc. has registered higher profit five times and raised profit by 2011 prediction as customers bought new heavy equipment to replace the older older computers during the economic recession.
Large manufacturer has the most earthmoving gear, said Friday that the strong demand for equipment used in the rising power mining helped income, while the demand for construction equipment has been slower to recover - a trend it said leaves plenty of room to increase sales and profits in the years to come.
It raised its profit for the year of the forecast to a range of 6.25 $ to $ 6.75, a range which, in its environment is 24 cents above earlier forecasts of Wall Street and suggests growth of about 57 percent of last year.
"If you really look at what happens to the United States, is a very slow recovery of very low numbers," said Chief Executive Doug Oberhelman on a conference call with analysts. "When the activity of construction of rebounds in the developed world, call the United States and the Western Europe, we will be ready."
Yet, as the company beat the expectations of the first quarter profit analysts by 53 cents per share, the forecast of the year suggests that the company will not continue its torrid pace through the rest of the yearsaid analyst Edward Jones Jeff Windau.
"They had a strong recovery, but now the comparable properties get a little tougher, Windau said." "" I expect that growth will moderate in the rest of the 2011. ?
ROLE CRESCENT OF COMMODITIES
The report comes a day after government figures showed that economic growth in the United States slowed considerably in the first quarter, with higher food and gasoline prices beginning to weigh on consumers, expenditures and raising concerns about inflation.
The inflation of the products is not necessarily bad news for companies including Caterpillar and General Electric Co which make the equipment used in the production of energy and raw material extraction. The growing demand and the prices of metals, from coal and oil are stimulates demand for Caterpillar heavy equipment - sales to minors and other resource companies has almost doubled in the course of the quarter, exceeding its construction equipment business.
"The product of strong base for us markets are a net positive based on the application, they lead to our mining business," compensate for the pressure of the margin of the higher costs of raw materials, said Chief Financial Officer Ed Rapp in an interview.
Exhibition of Caterpillar of goods such as coal and metals will only increase when it closes on its acquisition of 7.6 billion in mining equipment manufacturer Bucyrus International in the middle of this year.
Better results than expected obtain the company closer to its objective to close this agreement without issuing additional shares, said Rapp. When the takeover was announced, Caterpillar said it may be necessary to issue up to 2 billion dollars in shares to cover the purchase.
PROFIT TOPS STREET VIEW
Caterpillar reported first-quarter profit of 1.23 billion dollars, or $ 1.84 per share, compared to $ 233 million, or 36 cents per share, a year earlier. Analysts expected profit of $1.31 per share, according to Thomson Reuters I/B/E s.
Income grew by 57.2% 12.95 billion, above the expectations of 11.69 billion.
"This is a very large number on huge volume, which is the simplest way that he described," said research analyst Longbow Eli Lustgarten. He said income came in more than 1 billion dollars above forecasts.
Caterpillar joins a string of strong earnings reports from industry ranging from 3 M Co to Komatsu Ltd..
Its shares rose by 2.6% to $115.58 on the New York Stock Exchange. They earlier hit a high life expectancy of $116.25. As of the close of Thursday, they had increased 63 percent last year, more than four times the pace of the rise in the Dow Jones industrial average, which is a component Caterpillar.
Caterpillar, said that after the earthquake in the Japan in March would reduce its annual results, pulling down income by approximately $ 300 million and by $ 100 million operating profit.
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