PEORIA, Ill. – Caterpillar Inc. said today that its engine sales to the marine sector increased 47 percent in the second quarter of 2004 in North America and 38 percent worldwide, driven by growth in demand for large pleasure craft and increased construction of ocean-going vessels.
The company reported a record quarter with sales and revenues of $7.56 billion and profit of $552 million, or $1.55 per share. First half of the year results were also records, with company sales and revenues of $14.03 billion and profit of $964 million, or $2.71 per share.
However, Reuters news service said analysts had estimated the company’s second-quarter net income in a range between $1.55 to $1.90 a share and quoted Mark Koznarek, an analyst with FTN Midwest Research, who called Caterpillar’s results “somewhat disappointing.”
“We achieved record results in the second quarter as demand continued to surge and volume remained high across major industries and geographic markets,” said Caterpillar chairman and CEO Jim Owens. “We made a strategic decision to satisfy unprecedented customer demand even though this resulted in increased operating costs. These include higher material costs, mainly due to steel surcharges and increased expediting costs to ensure timely delivery of material.
“We have increased investment in our products, a trend we expect to continue in the second half of 2004.”
Caterpillar said its increase in sales and revenues was driven by $1.35 billion of higher machinery and engines volume, $131 million of increased price realization, a $116 million favorable impact of currency on sales due primarily to the strengthening euro and $33 million of higher financial products revenues.
The company increased its full-year outlook, and now expects 2004 sales and revenues to be up about 25 percent and profit per share to be up 80 to 85 percent compared to 2003. The previous outlook had called for sales and revenues to increase about 20 percent and profit per share to be up 65 to 70 percent compared to 2003.