Peoria, Illinois-based Caterpillar Inc issued its second-quarter results Wednesday, posting a surprise 67 percent increase in profit from the same period a year earlier while also expressing optimism about the rest of this year and the start of 2013. “We're playing for growth,” noted CEO Doug Olberhelman, even though a number of analysts expressed concern about the effect a looming global slowdown would have on the world's largest producer of construction and mining equipment. Caterpillar's quarterly results are often viewed as a bellwether for the overall economy because they are impacted by weakness in many areas of the industrial sector.
In the three months through June, Caterpillar's net income totaled $1.7 billion, or $2.54 a share, compared to a profit of $1.02 billion, $1.52 a share, in the year-earlier period. Overall revenue, meanwhile, rose more than 22 percent to $17.37 billion. Both figures exceeded Wall Street expectations and prompted the company to raise its forecast for fiscal 2012. The company's stock surged about 5 percent shortly after the earnings report came out, though they gave most of that gain back through the remainder of Wednesday's session, finishing up about 1.4 percent at $82.60 a share.
Unlike some of the world's more pessimistic economists, Boeing expects gradual improvement in the global economy heading into next year, even if the pace of growth remains weak. However, Oberhelman did say that the company remains prepared to take cost-cutting steps if conditions worsen. One particular area of concern for Caterpillar is China, where growth slowed to a three-year low last quarter. Caterpillar has built up a massive backlog of inventory in China, looking to cash in on the nation''s meteoric economic growth over the last decade or so, but the recent slowdown is hindering its plans on moving that inventory.