Caterpillar’s 2Q profit rises 34 percent as stronger sales outpace material, freight costs
Caterpillar Inc.’s second-quarter profit jumped 34 percent as stronger sales in developing countries outpaced slowing growth in North America and higher raw material and freight costs.
The Peoria, Ill.-based maker of backhoes and other heavy equipment on Tuesday reported profit of $1.11 billion, or $1.74 per share, for the three months ended June 30, compared with $823 million, or $1.24 per share, a year earlier.
Quarterly revenue rose 20 percent to $13.62 billion from $11.36 billion, with sales shifting outside North America. Caterpillar generated 60 percent of quarterly sales and revenue outside North America, up from 55 percent a year earlier.
Analysts polled by Thomson Financial, on average, expected a more modest profit of $1.54 per share on revenue of $12.69 billion.
Caterpillar said its quarterly sales and profit per share set all-time records.
“While North America remains depressed, and we’ve seen softening in Western Europe and Japan, Caterpillar continues to grow in emerging markets and in global industries like energy and mining,” Chief Executive Jim Owens said in a statement.
Owens said “supply is very tight” for many Caterpillar products, “and we are producing as much as we can.”
In June, the company announced plans to expand facilities in the United States, China and India.
“We need to bring additional capacity on line to support world demand for infrastructure, energy and mining, and to be prepared for the upturn in the United States when it comes,” he added.
Machinery and engine sales grew 21 percent to $12.8 billion in the quarter from $10.6 billion last year.
In the Asia-Pacific region, machinery sales increased 50 percent, to $1.4 billion, while engine sales climbed 57 percent, to $745 million. In Latin America, machinery sales grew 23 percent, to $1.0 billion, and engine sales jumped 42 percent, to $371 million.
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