Caterpillar posts record Q4 earnings, hammers Street estimates

Heavy machinery maker Caterpillar (NYSE:CAT) posted record earnings in its fourth quarter Thursday on strong demand, well beating Street estimates and sending its share price up before the opening bell.
 
For the three months that ended December 31, the company posted earnings of $1.55 billion, or $2.32 per share, up 60 percent from $968 million, or $1.47 per share, a year ago.
 
Revenues hiked 35 percent in total, to $17.24 billion, from $12.81 billion a year earlier.
 
According to Thomson Reuters, analysts had expected $1.73 per share in profits, on $16.05 billion in sales.
 
"Our strategy is squarely focused on customers, and in 2011 our employees, suppliers and dealers delivered," commented CEO Doug Oberhelman.
 
"We improved product quality, invested significantly in manufacturing capacity and product development, and improved our market position.
 
"We completed two large acquisitions—Bucyrus and Motoren-Werke Mannheim Holding GmbH (MWM)—in important growth industries that are a great strategic fit and provide our customers an even broader range of products."
 
Revenues under the company's machinery and power systems business increased 36 percent to $16.56 billion.
 
Sales from the construction industry under the unit increased 31 percent to $5.36 billion, as the company reported higher sales volumes in all geographic regions, especially for new products.
 
In the resource industry, sales rose 80 percent to $5.07 billion, largely due to higher sales volumes and the company's Bucyrus acquisition in July 2011. Meanwhile, power systems sales in the segment rose 22 percent to $5.67 billion on higher sales volumes for new equipment and parts, and improved price realizations, the company said.
 
Caterpillar's financials business posted $752 million in revenues, up four percent, primarily due to higher average earning assets, a favourable change from returned or repossessed equipment, and higher net revenues.
 
For the full year 2011, Caterpillar posted $4.93 billion, or $7.40 per share, in profits, an 83 percent increase over 2010. Revenues rose 41 percent to $60.14 billion.
 
"The 2011 increase in sales and revenues was the largest percentage increase in any year since 1947, and much of it was driven by demand for Caterpillar products and services outside of the United States," Oberhelman added.
 
"As a result, 2011 was a record-breaking year for U.S. exports at nearly $20 billion, which supported thousands of jobs in the United States, demonstrating the tangible benefits of free trade.
 
"Sales and export growth creates jobs, both in the United States and around the world. Not including acquisitions, our global workforce grew by more than 14,000 in 2011, and since the start of 2010, we have increased our workforce by more than 33,000, with more than 14,000 of those jobs in the United States."
 
The company’s total order backlog at year-end was $29.8 billion, up a whopping 59 percent from 2010.
 
Caterpillar's strong fourth quarter and full year results, as well as its record-setting backlog, has led the company to boost its revenues outlook for 2012.
 
The company said it now expects sales to be between $68 and $72 billion, while earnings are expected to be about $9.25 per share.
 
Analysts are expecting $9.07 per share for profits in 2012, on just $67.7 billion in sales.
 
Caterpillar said it expects its acquisitions to add about $6 billion to revenues, while a one to 1.5 percent increase in prices will help offset rises in material and labour costs.
 
In New York, shares of the Peoria, Illinois-based company rose 2.2 percent to $111.45, as of 8:41 am EDT.