Caterpillar Reports 44% Rise in 3rdQ Earnings

Caterpillar Inc. (NYSE:CAT) on Monday reported a 4 percent increase in its quarterly earnings, a rise which was possible because of a record increase in revenue in the previous quarter.

The company also said that it now expects that its full year profits and revenue will touch the upper limits of its early full year estimates on account increased demands. However the company also warned about the doubts of the company being able to sustain its record revenue next year on account of the uncertain economy.

For the year 2012, the heavy equipment manufacturer expects about 10 to 20 percent increase in overall revenue, above the $58 billion that the company is projected to announce by the end of this year. The company is preparing contingency plans for the next year in case of a reversal of demands from around the world.

Caterpillar is among the few companies that is contantly defying analyst projections and other companies in their industry in the current quarter. All the companies who have reported better than expected results this quarter are extremely cautious about the volatile economy and the loosing threat of a recession in Europe. Caterpillar is encouraged by the strong results and is cautious at the same time, just like its peers. The growth in fast growing markets such as Brazil and China is slowing down, which is a cause for concern for Caterpillar.

Doug Oberhelman, the Chief Executive Officer of the world’s largest heavy machinery manufacturer said that the uncertain economy and the threat of a recession has not affected the business of the company this quarter. Oberhelman is projecting a slow economic recovery, which will be visible in the next year’s revenue.

The quarterly earnings indicate that the company is coming slowly with grips with a global economy. The company heavy machine manufacturer has seen increased sales in regions outside of United States and in Untied States the company has seen increased machinery replenishment rate. A higher revenue in the third quarter helped the company to exceed expectations by analysts in the previous quarter. Revenue came from inventory rebuilding as dealers are aiming to build stocks.

The company has termed the demand for heavy machinery as “light” for the next year, instead the company will be moving its focus to its other products. Oberhelman said that the company is making strategic investment in order to position the company better for surviving next year.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.