Caterpillar more than quadrupled its fourth-quarter profit as stronger demand helped increase global sales of mining and construction equipment.
The Peoria, Illinois, based company said Thursday that it generated $968 million net income, or $1.47 per share. That's much higher than the previous year's $232 million net income, or 36 cents per share, but 2009's fourth quarter was also hurt by layoff costs that consumed 5 cents per share of profit.
Caterpillar said its revenue jumped 62 percent to $12.8 billion in the quarter over last year's $7.9 billion. The company said machinery sales improved both because customer demand strengthened and Caterpillar dealers replenished their inventories.
Analysts surveyed by FactSet expected Caterpillar to report quarterly earnings per share of $1.27 on revenue of $11.7 billion.
Caterpillar shares gained 47 cents, or about half a percent, to $96.22 in morning trading Thursday.
The company predicts a 2011 profit of nearly $6 per share on more than $50 billion in sales. Analysts are expecting $5.84 a share on $48.6 billion. And Caterpillar's outlook for 2011 doesn't include its pending acquisitions of Bucyrus International and German engine maker MWM Holding GmbH because those deals haven't closed yet.
Caterpillar Chairman and CEO Doug Oberhelman said the company expects the world's developing countries to keep growing in 2011 as the economies in North America and Europe continue improving. But developing areas like China, India and Latin America are likely to continue growing faster than developed nations.
Caterpillar's results are considered a strong indicator of global economic health because its machinery is used all over the world. The company predicts the global economy will grow 3.5 percent in 2011, which would be about the same overall rate as last year.
"We have updated our strategy, aligned the organization and are clearly focused on our customers. Investments are being made in new product development, additional capacity and strategic acquisitions that position us well for long-term growth and profitability," Oberhelman said.
Caterpillar says it hired about 19,000 people in 2010, including 7,500 in America, to respond to the increase in demand.
Caterpillar is also investing in its production capacity for products such as mining trucks and excavators. The company announced plans in 2010 to build three new facilities in the United States and five in other countries.
The company plans to invest about $3 billion in capital projects in 2011, and more than half of that will be in the United States.
For all of 2010 Caterpillar reported net income of $2.7 billion, or $4.15 per share, on revenue of $42.6 billion. That's considerably better than the previous year's $895 million net income, or $1.43 per share, on revenue of $32.4 billion.