updated 4/18/2008 11:35:03 AM ET 2008-04-18T15:35:03

Heavy equipment maker Caterpillar Inc. said Friday that demand for its global mining and energy products pushed first-quarter earnings up 13 percent, far surpassing Wall Street estimates. Its stock surged.

The results showed continued weakening in North America, where the economy has weighed on sales, but better-than-expected strength internationally as Caterpillar sales overseas benefited from the weak dollar.

Caterpillar said it earned $922 million, or $1.45 per share, in the January-March period compared with $816 million, or $1.23 per share, in the year-ago quarter. Analysts surveyed by Thomson Financial had been expecting earnings of $1.33 per share.

Revenue rose 18 percent to $11.8 billion from $10.02 billion a year earlier — fully $1 billion above analyst estimates. Sales increased 4 percent in North America and 30 percent internationally.

Caterpillar said the impact of currency added $310 million to its revenues.

CEO Jim Owens said the Peoria-based company's financial products business had its best first quarter for revenues and profit despite credit market challenges. He indicated the U.S. economic slowdown didn't prevent Caterpillar from having an overall bullish outlook.

"Even though North America, our largest geographic market, is depressed, we are investing for growth," Owens said.

Shares rose $4.58, or 5.8 percent, to $83.17 in morning trading.

Earnings were adversely affected by the U.S. economy. Write-offs as of March 31 were $20 million compared with $15 million at the same time last year, primarily due to the softening of the U.S. housing industry.

Caterpillar still expects 2008 earnings per share to rise 5 percent to 15 percent over 2007, and sales to improve by 5 percent to 10 percent, as North American weakness is offset by growth in emerging markets.

Morningstar analyst John Kearney said the results were positive and showed a continuation of recent trends.

"It's the same story we've been hearing for awhile now — North America is a tough environment but international markets are propelling the growth," he said. "International was particularly strong this quarter."

An emerging slowdown in both housing and non-residental construction in Europe poses some concern for the company in the future, he said.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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