U.S. construction equipment maker Caterpillar Inc reaffirmed on Monday a goal of higher sales and earnings this year thanks to rising business volumes and efforts to improve efficiency.
Speaking at the Bauma trade fair in Munich, Chief Executive James Owens confirmed statements in January that earnings per share (EPS) are set to jump 40 percent from $3.13 in 2003.
Owens, who took the helm at Caterpillar this year, also said sales and revenues should rise by 12 percent in the current year following 13 percent growth in 2003 to $22.8 billion.
"We're delighted with the way business is unfolding this year," he said.
Caterpillar is the world's largest maker of construction and mining equipment, diesel and natural gas engines and industrial gas turbines, according to its own statistics.
Owens also stuck to a forecast that the company would reach $30 billion in annual sales and revenues and a net profit margin upwards of nine percent in this decade. Forty percent of the targeted growth is expected to come from its diesel engines business alone.
"Based on real economic growth of three percent or more, we should hit $30 billion closer to 2006," he said. "When we reach this target, we also want to earn record profits."
Steel costs to ease later this year
Caterpillar, the largest consumer of heavy plate steel in the United States, said steel prices should ease somewhat later in the year.
"We're looking for steel prices to be up three or four percent on average this year," Owens said, though adding that he also saw room to raise product prices due to strengthened demand and the increasing costs of raw materials.
When asked about the status of wage talks with the United Auto Workers union, Owens declined to discuss specifics due to an imposed media black-out.
"I'm encouraged with the way talks have gone so far," he said. Caterpillar's contract with the UAW expires at midnight on March 31.
