After Strong Third-Quarter, Caterpillar Predicts $50 Billion in Sales and Revenues for 2011

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Researched by Industrial Info Resources (Sugar Land, Texas)--Caterpillar Incorporated (NYSE:CAT) (Peoria, Illinois) reported third-quarter fiscal profits of $404 million, up a whopping 96% from the company's earnings in the same period last year. Additionally, Caterpillar announced a preliminary outlook for 2011 of sales and revenues "approaching $50 billion," compared to a sales and revenue outlook for 2010 of $41 billion to $42 billion.

Third-quarter sales and revenues of $11.13 billion were up $3.84 billion from 3Q09. In a conference call regarding the financial quarter, Mike DeWalt, Caterpillar's director of investor relations, pointed to developing economies as the primary driver of growth. "In terms of end-user demand, good economic growth in the developing world has been positive for sales in Asia, Latin America, the CIS and Africa-Middle East," said DeWalt, who pointed out that the demand for commodities in these countries had boosted sales of mining equipment. "In addition, we are seeing growth in the developed countries of North America and Europe, albeit off depressed levels from 2009."

With refreshingly surprising candor, DeWalt explained the company's significant sales increase in the face of slow economic recovery in North America: "I know it's tough to understand why sales of CAT machines are up so much, and new machine sales in the United States are a good example that illustrates the point. Here's what's happening: First, sales to users peaked in 2006, then declined in 2007, declined again in 2008, and then declined even more significantly in 2009. From the peak quarter in 2006 to the bottom in late 2009, dealer machine sales to end-users in the U.S. declined nearly 80%. Today, we're seeing improvement from those low levels."

Caterpillar has continued strong investments and capital projects in the face of the economic downturn. Industrial Info is tracking more than $800 million of Caterpillar projects in the U.S. In September, the company held a dedication ceremony for a new road grader manufacturing plant in North Little Rock, Arkansas. The $140 million facility was built on a brownfield site, at a 700,000-square-foot former video-assembly plant. The plant has begun preliminary operations and currently has a workforce of about 200 people. When full operations begin, which is expected to occur by the end this year, the plant will employ about 600 people.

Industrial Info's North American Industrial Manufacturing Database covers all major segments of the manufacturing of durable and non-durable goods, including automotive, distribution and warehouses, heavy manufacturing, transport systems, semiconductors and computers, and more.

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