Shares of heavy equipment and engine manufacturer Caterpillar Inc. (NYSE: CAT) have been soaring in morning trading after the company reported a growth of 13% for its first-quarter profit, helped by strong international sales. The company offered the perfect example of the international growth importance.The company said its quarterly profit surged to $922 million, compared with $816 million a year earlier, boosted by strong global gains that offset weakness on highway truck markets in North America. Caterpillar posted earnings $1.45 per share, exceeding analysts' forecast for a quarterly profit of $1.33 per share.
Total sales for the company rose by a respectable18% year over year to $11.8 billion, beating analysts' expectations by $1 billion, according to Thomson Financial. This was mainly because the heavy equipment maker benefited from a rise of 30% in international sales, while North America revenue came with a small increase of only 4%. The results proved continued weakening in North America, where sales have been under pressure from the sluggish economy, but strength internationally where the weak dollar lifted the company's sales.
Caterpillar also noted it would continue to invest for growth based on strong demand from emerging markets. "We are significantly increasing capital expenditures for improved productivity and higher capacity, and our research and development is focused on sustainability and innovative new products," Chairman and CEO Jim Owens stated.
Looking ahead to the company's full year numbers, Caterpillar still expects a growth of 5% to 15% for 2008 earnings, with sales increasing in a range between 5% and 10%.
Traders expressed their enthusiasm over the company's positive earnings figures and optimistic outlook, pushing the stock over 5% higher in morning trading.
Eliza Popescu is a financial writer for the online investment advisory service Investor's Observer.
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