If you're at all down in the dumps about the economy, I have a possible elixir for you: Simply print out a copy of Caterpillar's
Let's look at what I'm referring to: For the quarter, the company's income rose by more than a third -- 34%, to be precise -- over last year's figure. At $1.11 billion, it translated to $1.74 a share, from $823 million and $1.24 per share last year. OK, we’ll be picky: But for a tax benefit in the quarter, income would have risen "only" 29% and the per-share improvement would have been 35%, rather than 40%.
But the key here is that this is a company that -- like DuPont
The company hasn't merely been riding a wave of breakneck growth in certain industries or developing parts of the world. Sure, it's benefited from increasing commodities prices and frenetic activity in mining, for instance -- CEO Jim Owens specifically mentioned coal mining during his call -- but there are signs that it's being managed effectively, as well. For instance, Caterpillar's manufacturing costs were up just 1.5% in the second quarter. That's impressive, given the way inflation has been raising its ugly head.
Can this continue? Apparently it can. Management has raised its sales forecast for this year to an even $50 billion, from a $47.2 billion to $49.5 billion range. And it also nudged up its EPS guidance. Beyond that, many of Caterpillar's products are "production constrained," and, as Owen noted, "we are selling as much as we can make."
In the days and weeks ahead, I'll be awaiting the results from Caterpillar's fellow equipment maker Deere
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