Caterpillar buoys markets with profit leap

Equipment maker Caterpillar has buoyed US markets this morning with a 44 per cent increase in its net profits for the past quarter and a bullish outlook for the year.

Caterpillar, which makes diggers and other machinery for heavy industry, said its net income for the quarter to September hit $1.14bn, up from $792m in the same period a year earlier.

Revenues rose 41 per cent to $15.7bn – a record high – and the company said its full-year 2011 results would come in at the highest end of its previous outlook.

"Although there is a good deal of economic and political uncertainty in the world, we are not seeing it much in our business at this point," chief executive Doug Oberhelman said in a statement.

"We believe continued economic recovery, albeit a slow recovery, is the most likely scenario as we move forward."

The news has sent markets higher, with the Dow up 0.3 per cent and the S&P 500 up 0.4 per cent.

Caterpillar said it expects full-year 2011 profit and revenue to be at the top end of its previous outlook range due to strong demand.

In 2012, Caterpillar expects revenue to increase at ten to 20 per cent above the $58bn in sales it expects this year.