CAT Sees Improvement In 1st Quarter Results

During the first quarter of 2010 Peoria, IL-based Caterpillar posted earnings of $233 million, a turnaround from the loss of $112 million, reported in last year’s corresponding period. Since the beginning of the year Caterpillar’s market value has risen 26.9%.

“Economic conditions are definitely improving, particularly in the world’s developing economies. Industry activity and orders are significantly higher than last year and are at record levels in some areas,” said Caterpillar Chief Executive Jim Owens.

Caterpillar said the earnings jump came on a mix of lower manufacturing costs, among other factors. The company noted that the improvements were partially offset by the impact of lower sales volume and higher taxes, including the $90 million charge related to the recently signed U.S. health care legislation. The company now expects sales in a range between $38 billion and $42 billion.

Company sales, while strong, were weaker than the market would have hoped, falling 7.3% to $631 million, from $681 million in 2009. The company credited the drop primarily to a $71 million impact from lower-earnings assets, along with an $11 million unfavorable impact from returned or repossessed equipment.