 Caterpillar climbs on Asia sales
(China Daily)
Updated: 2008-07-23 07:40
Caterpillar Inc, the world's largest maker of earthmoving equipment, said second-quarter earnings climbed 34 percent, exceeding analysts' estimates, on demand for backhoes and mining equipment in Asia and the Middle East. Caterpillar rose in early US trading. Net income increased to $1.11 billion, or $1.74 a share, from $823 million, or $1.24, a year earlier, the Peoria, Illinois-based company said yesterday in a statement. Sales increased 20 percent to $13.6 billion. Caterpillar said developing markets may grow more than six times as fast as in North America, where in the US it may be "difficult for the economy to avoid a recession" amid job cuts. Projects to build roadways and power grids increased demand for construction equipment in Asia and the Middle East, and rising prices for oil and coal spurred sales of mining machinery. "We're waiting to see that Caterpillar can give us a sign that there is some improvement in North America," Bill Batcheller of Butler Wick & Co in Youngstown, Ohio, said. "Obviously it is not yet. The North America and European growth profiles are pretty weak." He helps manage $925 million in assets, including Caterpillar shares. Caterpillar rose $1.77, or 2.4 percent, to $75 at 7:48 am in early US trading after closing at $73.23 on Monday in New York Stock Exchange composite trading. The stock had gained less than 1 percent this year. For the full-year, Caterpillar now forecasts profit of $6 a share, within the range of $5.64 to $6.18 it projected in October. The company expects sales of $50 billion, above the prior forecast of $47.2 billion to $49.5 billion. Analysts, on average, project $6.03 a share and revenue of $48 billion. Chief Executive Officer Jim Owens lifted machinery prices as much as 5 percent, effective this month, as prices for steel, copper and crude oil topped company projections. The Institute of Supply Management's index of raw material costs last month jumped to the highest level in almost three decades. Agencies (China Daily 07/23/2008 page17) |
