Friday, April 18, 2008

Caterpillar first quarter 2008 profit jumps 13 percent

CAT had a very good quarter buoyed by strong international sales out of emerging markets. According to CEO James Owens 60 percent of sales are coming from outside the U.S. Owens said the company's order book is healthy with orders for 18 month to 2 years for heavy machineries. He noticed some slowdown in OECD countries but believes that the commodity cycle has a "long way to go".

About the price of oil he said:
"Prices north of 45 to 50 dollar (Fri. close @ $116.97) will continue to drive investment. The same for copper with prices of 1.70 to 2 dollar (Fri. close @ 3.893) per pound." (emphasis added)

He thinks that house prices are likely to continue to erode and come down 5 - 10 percent in the next 12 to 18 month.

out of the call ( not part of the video):
Caterpillar now predicts 2008 gross domestic product may rise 0.5 percent in North America, compared with global growth of 3 percent. The company previously projected 1.1 percent economic growth in North America and 3.1 percent worldwide.

Caterpillar said earlier this month it is seeking a price increase of as much as 5 percent on machinery and engines worldwide as costs for materials such as steel, copper and oil rise. Raw material costs have climbed about 1.5 percent a year in the past five years, the company said.

click for video

video: Caterpillar CEO James Owens discusses his company's earnings and outlook with CNBC's Erin Burnett.

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