By Jason Simpkins
Caterpillar Inc. (CAT) beat estimates up and down Wall Street with a 13% jump in first-quarter profit that was largely driven by booming international sales.
Caterpillar reported net income of $992 million ($1.45 a share) for the quarter, up from $816 million ($1.23 a share) a year ago. Sales soared 18% to $11.8 billion. International sales rose 30% and accounted for 58% of total revenue.
"Developing countries maintained expansive economic policies, which allowed good economic growth to continue," the company said in a statement. "As a result, construction increased significantly in many countries."
Sales in the Asia Pacific region grew 37% to $1.85 billion as construction and mining projects came to dominate the landscape overseas.
"Sales volume increased substantially in China," and sales growth in India was "sizeable," the company said.
Caterpillar will look to build on those markets by building three new factories in China for engines, wheel loaders and parts. It has also purchased the remaining 60% stake in Shandong SEM Machinery Co., one of Caterpillar's 16 Chinese ventures.
Revenue from Europe, Africa, and the Middle East jumped 30% to $3.81 billion and Latin American sales were up 24% to 1.23 billion.
Sales in the developing world grew seven times faster than in North America, where Caterpillar posted a mild 3% sales increase. A weak dollar and foreign exchange rates added an extra $310 million to international sales.
The world's largest manufacturer of bulldozers and excavators expects earnings to increase by as much as 15% for the full year.
Shares of Caterpillar jumped more than 8% on the news to close at $85.04 on Friday.
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