Caterpillar posted second-quarter profit that exceeded analysts’ estimates as stimulus programs and improved credit markets helped stabilize demand for the world’s largest maker of bulldozers and excavators.
The company raised its full-year forecast and its shares rose in early New York trading.
Net income dropped to $371 million, or 60 cents a share, from $1.11 billion, or $1.74, a year earlier, the Peoria, Illinois-based company said in a statement today.
Chief executive officer Jim Owens (63) has pushed the US government for favourable tax and trade policies to boost sales and has eliminated more than 24,000 jobs since December.
Slack demand in the worst recession in half a century led Caterpillar to report its first quarterly loss in 16 years in April.
“We are seeing signs of stabilization that we hope will set the foundation for an eventual recovery,” Mr Owens said in the statement.
“Credit markets have improved significantly. Fiscal policy and monetary stimulus have been introduced around the world, and we are seeing signs, particularly in China, that they are beginning to work.”
The company raised its full-year forecast to $1.15 to $2.25 a share excluding some items, above analysts’ average estimate of $1.12. Sales will be from $32 billion to $36 billion for the year, in line with the average estimate of $34.8 billion.
Bloomberg