Caterpillar Inc. more than doubled its third-quarter profits, riding an economic rebound that has fueled record sales of heavy equipment and engines, the company reported Thursday.
Resurgent demand that took root more than a year ago helped the Peoria-based manufacturer beat Wall Street's expectations, with sales and earnings that reached new highs for the third straight quarter.
The heavy equipment giant posted net profit of $498 million, or $1.41 a share, for the quarter that ended Sept. 30, up from $222 million, or 62 cents a share, during the same period last year. Earnings outpaced the estimate of $1.36 a share in an analysts' survey by Thomson First Call.
Sales and revenues were a record $7.65 billion, up 38 percent from $5.55 billion a year earlier.
Caterpillar chairman and CEO Jim Owens credited the surge to "the strongest recovery we're ever seen across the broad spectrum of markets we serve." The company reported profits on engine sales were up 96 percent, while machinery profits increased 78 percent.
Owens predicted a record earnings year for the world's largest maker of construction equipment, repeating a forecast he first unveiled during a mining trade show last month in Las Vegas. Full-year sales and revenues are expected to increase 30 percent, he said, and per-share profits will go up 80 percent to 85 percent.
Owens said the unprecedented demand has stifled profits because of increased labor and material costs to meet a nearly 40 percent production increase. But he said the company is "aggressively managing this upturn with a determination to improve our cost structure."
Caterpillar predicted worldwide economic growth will slow slightly in 2005, bringing a 10 percent increase in sales and revenues, with record profit per share.
The company designs and manufactures mining, construction and agricultural machines, as well as engines for earth moving and construction equipment. It also is the world's leading manufacturer of electrical generators.