Caterpillar Reports Q1 Results (CAT)

World’s largest construction and mining equipments manufacturer, Caterpillar Inc. (NYSE: CAT) announced its fiscal first quarter earnings on Wednesday. The Company announced that its profits climbed up 29 %, while earnings per share for the quarter stood at $2.37, for the period.

However, company shares lost 5% on Wednesday as Wall Street was expecting better results.

The company’s net income stood at $1.59 billion during the quarter, up from last year’s $1.23 billion or $1.84 per share.

Caterpillar now expects that its earnings per share could be of $9.50 in 2012, against previous estimations of $9.25 a share.

Meanwhile the Company also said that it will continue investing more on its manufacturing capacity as   current record backlog of orders, especially for its mining products, hurts its productivity and efficiency.

Strong Demand Ahead

Caterpillar said it expects the global economy will continue to recover, witnessing an average 3 percent growth in 2012. The Company believes that although much of Europe will see little or no economic growth this year, the U.S. economy will likely see similar growth levels.

According to Standard & Poor’s Capital IQ analyst Michael Jaffe,   strong replacement demand for Caterpillar equipment in the United States and significant global demand for its mining products will push the demand for caterpillar equipments even as sales have slowed in China and Brazil.

However, during a conference call, the Company officials tried to allay fears about slowing growth in China. Mike DeWalt, the company’s director of investor relations, said China is significant to Caterpillar’s long-term plans, but it represents only about 3 percent of total sales now. Besides the situation is a temporary byproduct of the Chinese government’s efforts to control inflation, said DeWalt.

Nonetheless, DeWalt did insist that China is a major long-term growth opportunity, with significant development and growth potential.

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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.