Cat bullish despite third quarter profit fall

A fall in third quarter sales and profit has not prevented Caterpillar from increasing its full year forecast.

Revenue in the third quarter was £4.4bn, down by 44% on the same period last year, while profit was more than halved at £246m. However, given the current economic climate Jim Owens, Cat’s chairman and chief executive officer, was pleased with the result and said sales were currently well below end-user demand because dealers were cutting their stock levels.

“We believe the third quarter marked the low point for Caterpillar sales and revenues in what has been the toughest recession since the 1930s. We are seeing encouraging signs that indicate a recovery may be underway,” Owens said, although he added that uncertainty remained about the timing and strength of the recovery.

The firm predicts full year sales to be above £19.5bn and has increased its mid-range profit forecast (including redundancy costs) from £365m to £495m.  Furthermore it expects sales and profit to increase by between 10% and 25% in 2010.