01.05.2010

CAT boosts profits and upgrades forecasts

Construction equipment manufacturer Caterpillar has reported a return to profitability in the first quarter on lower revenues and upped its full year forecasts.

Total revenues were $8.24 billion a fall of 11 percent on the same period last year, almost all of which was down to lower engine sales. Machinery sales slipped just one percent its lowest decline since the current recession began in 2008.

The revenues were buoyed by strong increases in the Asia Pacific and Latin America regions, while sales in North America declined 15 percent and in Europe 27 percent.

Pre-tax profits increased to $469 million compared to a loss of $212 million in the first quarter of 2009.

As a result of the improving situation in most of the markets CAT has increased its full year projections for both revenues and profits by between 10 and 15 percent. It is now predicting revenues for the year to come in between $38 and $42 billion.

Vertikal Comment

Overall this is a good indicator for the equipment industry as a whole and a further indication that the construction market has at least bottomed out on a worldwide basis.

CAT has also seen an improvement in prices which must work through to the rental sector and eventually boost used equipment prices and the asset values of rental fleets, all of which will help in the recovery.