Caterpillar Inc. reported Tuesday that fourth quarter earnings rose a better-than-expected 14 percent on improved equipment and engine sales, signaling the economic recovery may be restoring big-ticket purchases.
The strong quarter capped a year in which Caterpillar, the world's No. 1 maker of earth-moving machinery, posted a 38 percent profit increase.
Net income for the last three months of the year was $349 million, or 97 cents a share, compared with $305 million, or 88 cents a share, for the same period a year earlier. The per-share earnings were 3 cents higher than the consensus estimate of analysts surveyed by Thomson First Call.
Revenue rose 20 percent to $6.5 billion from $5.4 billion.
The company said higher machine and engine sales helped fuel the profit increase, along with reduced operating costs and the weak dollar, which boosted the impact of overseas sales.
"We are well on our way to achieving our growth target of $30 billion of sales and revenue in this decade," said Glen Barton, who will retire this week as the company's chairman and CEO.
Jim Owens, who will replace Barton effective Sunday, said Caterpillar showed strong sales of its new clean-diesel engines, and that dealers continued to expand their rental facilities. Ongoing cost-cutting efforts also continued to boost company profits, Owens said.
Owens predicted that profits will rise 40 percent and revenues will increase 12 percent in 2004.
For the full year, Caterpillar had a net profit of $1.1 billion, or $3.13 per share, up from $798 million, or $2.30 per share, in 2002. Revenue rose 13 percent to $22.7 billion.
Caterpillar designs and makes mining, construction and agricultural machines, as well as engines for earth moving and construction equipment. It operates manufacturing plants in 22 countries.
Caterpillar shares fell 50 cents to $84.51 in morning trading on the New York Stock Exchange.
