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Caterpillar Profit Soars 91 Percent in Second Quarter

Caterpillar Inc. (NYSE: CAT) last week reported a second-quarter profit of $1.09 per share, an increase of $0.49 per share from a profit of $0.60 per share in the second quarter of 2009. Profit of $707 million was 91-percent higher than second-quarter 2009 profit of $371 million. Sales and revenues of $10.41 billion were up 31 percent from $7.98 billion in the second quarter of 2009.

"We've been highly focused on three things this year — significantly increasing production in response to higher demand from our customers, particularly in developing economies, aggressively managing costs and driving better cash flow," said Caterpillar CEO Doug Oberhelman. "You can see the results in our second quarter — sales and revenues increased substantially, operating profit as a percent of sales more than doubled, and Machinery and Engines operating cash flow and our debt-to-capital ratio strengthened. Our employees, dealers and suppliers are doing a great job ramping up to support customers. The increase in our sales from first to second quarter 2010 was one of the most significant quarter-to-quarter increases in our history.”

Sales and revenues were up $2.43 billion from the second quarter of 2009. Sales volume improved $2.26 billion, price realization was favorable $187 million, and the impact of currency added $23 million. Financial Products revenues were down $35 million. Profit was up $336 million from the second quarter of 2009. The increase was primarily the result of higher sales volume, improved operating efficiencies and favorable price realization, partially offset by higher taxes, provisions for incentive compensation and the absence of $110 million of LIFO inventory decrement benefits from the second quarter of 2009.

The company is improving its outlook for 2010 by raising the sales and revenues range and increasing profit expectations. Sales and revenues are now expected to be in a range of $39 to $42 billion, with a midpoint of $40.5 billion. The increased 2010 profit outlook is a range of $3.15 to $3.85 per share, with a midpoint of $3.50 per share. The previous sales and revenues outlook was a range of $38 to $42 billion, and the previous profit outlook range was $2.50 to $3.25 per share.

"We're very pleased to increase our outlook for 2010. It reflects an increase in sales and revenues and a more significant increase in profit--a result of our continuing focus on cost management and profit improvement," Oberhelman said. "While there are significant economic concerns around the world that we are watching closely, orders have continued to outpace our shipments, and we expect to increase production in the second half of the year."

Peoria, Ill.-based Caterpillar Inc. had 2009 sales and revenues of $32.39 billion. It is a leading international manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines.

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