Caterpillar (NYSE: CAT), easily the world's biggest manufacturer of large construction equipment, has come back -- roaring back. Following a period of slowing business and employee layoffs, the company -- an industrial bellwether -- still is working its way through problems, but they're the sort of difficulties that management wouldn't trade for the world: The company is stretching to meet demand for some of its products.

For the most recent quarter, Caterpillar reported a record profit of $1.23 billion, a more than 500% improvement over the $233 million for the same quarter in 2010. On a per-share basis, the most recent results skyrocketed to $1.84, from $0.36 just four quarters earlier. The solid earnings occurred through revenues of $12.9 billion, up 57% from $8.24 billion in the first quarter of 2010.

Putting his company's results in perspective, CEO Doug Oberhelman said, "I am very pleased with our first-quarter result -- demand continued to improve, we increased production, cost control was excellent, and our operating profit margin improved." Indeed, along with companies such as DuPont (NYSE: DD), 3M (NYSE: MMM), and Dow Chemical (NYSE: DOW) -- all of which have produced solid results in their most recent earnings announcements -- Peoria, Ill.-based Caterpillar provides indications of economic strength and recovery powers in specific sectors.

In Caterpillar's case, those sectors include mining, construction, roads, and energy. Judging from its planned $3 billion capital budget for 2011 -- largely for plant construction and upgrades -- along with the challenges inherent in keeping abreast of customer demand in certain areas, the company's picture continues to brighten appreciably.

Management anticipates an improved ability to service customers in the mining industry once, likely in the middle of this year, it completes its $8.6 billion acquisition of Bucyrus International (NYSE: BUCY), the Milwaukee area-based manufacturer of equipment for that expanding industry.

Also looking ahead, the company said, "The outlook for 2011 has improved. Sales and revenues are now expected to be in the range of $52 to $54 billion and profit in a range of $6.25 to $6.76 per share. The previous 2011 outlook was for sales and revenues to exceed $50 billion and for profit to be near $6.00 per share."

Clearly nudging the powers that be regarding the nation's economy, Oberhelman said, "We are positive about the short-term U.S. economic outlook, but believe bipartisan actions are needed in Washington to improve the long-run fiscal position of the U.S. government." He added that, "Instead of pointing fingers at each other, the Administration and members of Congress need to work hand in hand ..."

All in all, it's difficult to find fault with the rapid pace of Caterpillar's comeback or its future for further expansion. Fools would be wise to add the company to your watchlist, our free stock monitoring service. Careful study of this big company could result in a healthy infusion of portfolio pesos.  

David Lee Smith doesn't own shares in any of the companies whose names appear above. 3M is a Motley Fool Inside Value choice. Try any of our Foolish newsletter services free for 30 days.

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