The New York Times-20080126-Caterpillar Increases Profit With Strong Overseas Growth

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Caterpillar Increases Profit With Strong Overseas Growth

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Caterpillar, one of the world's largest construction equipment makers, said Friday that its fourth-quarter earnings rose 11 percent on strong international growth.

The company, based in Peoria, Ill., said it expected solid profit growth from overseas sales this year as well.

Caterpillar earned $975 million, or $1.50 a share, compared with $882 million, or $1.32 a share, a year earlier. Revenue rose 10 percent, to $12.14 billion, from $11 billion in the prior-year period.

Analysts were expecting a profit of $1.50 a share on revenue of $11.79 billion, according to a poll by Thomson Financial.

Caterpillar expects economic growth in the Unites States to slow to 1 percent this year, partly because of continued weakness in home construction.

But Caterpillar's chief executive, James W. Owens, said strong economic growth outside the United States would offset weak domestic demand. Global markets for mining, energy and infrastructure development are booming, he said in a statement.

The company is predicting profit growth of 5 to 15 percent in 2008, on revenue that will rise 5 to 10 percent year-over-year. The prediction implies 2008 profit of $5.64 to $6.18 a share on revenue of $44.06 billion to $46.16 billion.

Almost 60 percent of Caterpillar's fourth-quarter sales were outside North America, an almost 10 percent increase from just a year earlier.

The company said it also benefited from the weak dollar. Currency fluctuations added $334 million to fourth-quarter revenue, Caterpillar said.

The company plans to spend $2.3 billion this year to add production capacity to deal with order backlogs of construction equipment and other products, a 35 percent increase.

Caterpillar shares rose 68 cents, to $65.93.