Caterpillar profit tops view, raises forecast

Caterpillar Inc reported stronger-than-expected quarterly profit and raised its full-year outlook, citing sales growth in emerging markets, especially from customers in mining and energy.

The company said its ability to pass along price increases on its earth-moving machines, engines and turbines more than offset a dip in revenue from its financial services unit.

The world's largest maker of construction and mining equipment said orders were continuing to outpace shipments to dealers, and it now expects to further ramp up production in the second half.

One sign of the company's confidence: It said it had brought on 3,650 new employees this year - 1,250 in the United States and 2,400 internationally.

But Caterpillar, which laid off nearly 30,000 full-time and contract workers worldwide from late 2008 through 2009, sounded a cautious note, saying it still has "significant economic concerns," including the risk of a double-dip recession in Europe and the United States.

The company posted a second-quarter profit of $707m, or $1.09 a share, up from $371m, or 60 cents a share, a year earlier.

Sales, plus revenue from financial services, rose 31 per cent to $10.41bn.

Analysts on average expected the Peoria, Illinois-based company to report a profit of 85 cents a share on sales of $9.8bn, according to Thomson Reuters I/B/E/S.

In premarket trading, Caterpillar shares were up 24 cents to $67.11.

Caterpillar said it expects a full-year profit of $3.15 to $3.85 a share on sales of $39bn to $42bn. It previously forecast $2.50 to $3.25 a share on sales of $38bn to $42bn.

Analysts on average were expecting a full-year profit of $3.29 a share before items, and net income of $3.18 a share, on sales of $38.9 billion, according to Thomson Reuters I/B/E/S.