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To: Johnny Canuck who wrote (44901)	7/22/2008 10:25:15 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 69332

Caterpillar 2Q Net Up 34% On Record Sales; Outlook Raised DOW JONES NEWSWIRES Caterpillar Inc. (CAT) reported a 34% increase in second-quarter net income as worldwide sales and price increases boosted revenue to record levels. Despite a weakened U.S. economy the maker of earth-moving equipment still posted results well above Wall Street's expectations, as rising prices and sales helped offset the soaring production costs. "Never in my 35 plus years with the company have I seen Caterpillar do so well in the face of such a difficult economic climate in the United States," said Chief Executive Jim Owens. "While North America remains depressed and we've seen softening in Western Europe and Japan, Caterpillar continues to grow in emerging markets and in global industries like energy and mining." Shares of Caterpillar closed at $73.23 on Monday, and rose 2.4% to $75 in premarket trading. Caterpillar posted net income of $1.11 billion, or $1.74 a share, up from $823 million, or $1.24 a share, in the previous year. Revenue increase by 20% to $ 13.64 billion, aided by increased prices and the weaker dollar. The mean estimates of analysts polled by Thomson Reuters were for earnings of $1.54 a share on revenue of $12.69 billion. Sales outside of North America rose 30% and made up 60% of total sales, up from 55%, as the U.S. market, which rose 7%, continues to be weak for construction spending. To offset U.S. declines and a softening Europe market, Caterpillar has increased spending on emerging markets, announcing last month that the company will look to average $2 billion per year in worldwide expansion. But the heavy- equipment producer has also announced plans to spend $1 billion in Illinois and work on developing new heavy-duty construction trucks for the U.S. market. Caterpillar also altered its year-long outlook, raising revenue estimates to $ 50 billion from $47.2 billion to $49.5 billion. Earnings per share are now expected to be about $6, a bit higher than the $5.91 midpoint of its prior forecast given in May. The company now sees world economic growth to average less than 3% in 2008, the slowest growth rate since 2003, with developing economies leading the way. It expects inflation will become the major target of central banks, but still thinks developed countries will cut interest rates late in the year. The company foresees the U.S. economy to grow by about 1% this year, and for the housing market to continue to flounder.