Ct Automotive Regulatory News (CTA)

Caterpillar Inc.

2Q 2011 Earnings Release

July 22, 2011

FOR IMMEDIATE RELEASE

Caterpillar Second-Quarter Sales and Revenues up 37 Percent; 2011 Outlook Improves for Sales and Revenues and Profit Excluding Bucyrus-related Impacts

Second-quarter Profit Per Share up 58 percent at $1.72 excluding Bucyrus-related impacts

and up 39 percent at $1.52 including Bucyrus-related impacts

PEORIA, Ill.- With continuing improvement in demand around the world, Caterpillar Inc. (NYSE: CAT) today reported second-quarter 2011 profit per share of $1.72 excluding $204 million of expense related to the acquisition of Bucyrus, a 58-percent improvement from $1.09 in the second quarter of 2010. Including the impact of Bucyrus, profit per share was $1.52, up 39 percent from the second quarter of 2010. Profit was $1.015 billion in the second quarter of 2011, an increase of 44 percent from $707 million in the second quarter of 2010. Sales and revenues of $14.230 billion were up 37 percent from $10.409 billion a year ago.

 "Customer demand around the world continues to improve, and our sales and revenues reached an all-time record in the second quarter. Our employees, dealers and suppliers should feel great about the way they're responding to the increase in customer demand," said Chairman and Chief Executive Officer Doug Oberhelman.

"We're currently focused on four big themes linked to our corporate strategy. The first is executing the Cat business model and improving value for our customers. We're doing that in a number of ways-improving quality, executing the Caterpillar Production System and the development of new products and solutions-such as our new range of products for Tier 4 emissions. The second theme is increasing capacity and production levels to satisfy the demand we see today and what's down the road as the global economy continues to improve over the next few years. We've announced many significant investments in the United States and around the world over the past year and are expecting capital expenditures of about $3 billion in 2011. Demand growth and our investments through the end of June have resulted in more than 27,000 additional people in our global workforce since the beginning of 2010. We expect to continue hiring in 2011, including at our brand new U.S. facilities in Texas, Indiana, North Carolina and Ohio," Oberhelman said.

"The third important theme is our focus on costs. There are certainly cost pressures in our business-freight and material costs are up, and our investments in R&D and capacity are driving increases. That said, we're serious about improving the value of our products and services to customers and delivering great returns to stockholders, and that means we must stay focused on controlling costs. It's a major priority, and it will continue. The disaster in Japan had a $200 million negative impact on second-quarter sales, was negative on costs and efficiency and lowered operating profit nearly $60 million. However, the negative impacts from Japan are now behind us," Oberhelman added.

"Our fourth major theme is integrating and delivering the value we expect from our recent acquisitions of EMD and Bucyrus. We completed our historic acquisition of Bucyrus on July 8, 2011, and are pleased to welcome 10,000 new employees to Caterpillar. The acquisition of Bucyrus was driven by the robust long-term growth opportunities expected in mining. The acquisition, combined with our aggressive product development, significant capacity expansion plans and the strength of our dealer network positions us with the industry's broadest range of surface and underground mining products and solutions to serve mining customers around the world. We are thrilled that Bucyrus is now Caterpillar," Oberhelman added.

Outlook

Because we have completed the Bucyrus acquisition, our outlook includes an estimate of Bucyrus-related impacts. However, to provide a more consistent comparison with 2010 and our previous outlook, we are also providing our 2011 outlook excluding the impact of Bucyrus. Excluding the impact of Bucyrus, we are raising expectations for 2011. We expect sales and revenues in a range of $54 to $56 billion and profit per share of $6.75 to $7.25. That is an improvement from our previous outlook of $52 to $54 billion of sales and revenues and profit per share of $6.25 to $6.75.

Our 2011 financial results will include about a half year of Bucyrus results and most of the up-front and integration costs related to the acquisition. We expect that Bucyrus will add about $2 billion of sales in 2011 and negatively impact full-year profit by about $0.50 per share. In total, including Bucyrus, we expect sales and revenues in a range of $56 to $58 billion and profit per share of $6.25 to $6.75.

"While the economic recovery in the United States continues to be weaker than many expected, we're forecasting continued moderate economic expansion. That, coupled with stronger growth in the developing world, is driving higher sales for Caterpillar. There's been quite a bit of concern in the media over the past few months centered on China. While we've seen some softening of growth in China, dealer deliveries to end users were up in the second quarter of 2011 compared with the second quarter of last year and grew at a faster rate than the overall industry in China. In our view, China is doing a good job of balancing growth and inflation, and our expectations for China remain positive. That said, we can't lose sight of the significant growth that's going on around the world outside the United States and China. Economic activity and our business in Latin America, the Middle East, Africa, CIS and greater Asia are robust," Oberhelman added.

"While we expect moderate U.S. economic growth, we believe a lack of confidence in the business climate is the major impediment to a stronger recovery and job creation. Lack of clarity on a U.S. deficit reduction plan, trade policy, regulation, much needed tax reform and the absence of a long-term plan to improve the country's deteriorating infrastructure do not create an environment that provides our customers with the confidence to invest. We're confident that as a country we'll eventually get it right, and we're positioning Caterpillar to be ready when we do. The scale of investment in our existing businesses coupled with our recent acquisitions put us in a unique position for growth and leadership as we drive forward to meet our 2015 goals," Oberhelman said.

Notes:

- Glossary of terms is included on pages 22-23; First occurrence of terms shown in bold italics.

- Information on non-GAAP financial measures is included on page 24.

For more than 85 years, Caterpillar Inc. has been making sustainable progress possible and driving positive change on every continent. With 2010 sales and revenues of $42.588 billion, Caterpillar is the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. The company also is a leading services provider through Caterpillar Financial Services, Caterpillar Remanufacturing Services, Caterpillar Logistics Services and Progress Rail Services. More information is available at: http://www.caterpillar.com.

Caterpillar contact: Jim Dugan, Corporate Public Affairs, (309) 494-4100 (Office) or (309) 360-7311 (Mobile)

FORWARD-LOOKING STATEMENTS

Certain statements in this release relate to future events and expectations and are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to known and unknown factors that may cause Caterpillar's actual results to be different from those expressed or implied in the forward-looking statements. Words such as "believe," "estimate," "will be," "will," "would," "expect," "anticipate," "plan," "project," "intend," "could," "should" or other similar words or expressions often identify forward-looking statements. All statements other than statements of historical fact are forward-looking statements, including, without limitation, statements regarding our outlook, projections, forecasts or trend descriptions. These statements do not guarantee future performance, and Caterpillar does not undertake to update its forward-looking statements.

It is important to note that Caterpillar's actual results may differ materially from those described or implied in its forward-looking statements based on a number of factors, including, but not limited to: (i) global economic conditions and economic conditions in the industries and markets Caterpillar serves; (ii) government monetary or fiscal policies and government spending on infrastructure; (iii) commodity or component price increases and/or limited availability of raw materials and component products, including steel; (iv) Caterpillar's and its customers', dealers' and suppliers' ability to access and manage liquidity; (v) political and economic risks associated with our global operations, including changes in laws, regulations or government policies, currency restrictions, restrictions on repatriation of earnings, burdensome tariffs or quotas, national and international conflict, including terrorist acts and political and economic instability or civil unrest in the countries in which Caterpillar operates; (vi) Caterpillar's and Cat Financial's ability to maintain their respective credit ratings, material increases in either company's cost of borrowing or an inability of either company to access capital markets; (vii) financial condition and credit worthiness of Cat Financial's customers; (viii) inability to realize expected benefits from acquisitions and divestitures, including the acquisition of Bucyrus International, Inc.; (ix) international trade and investment policies, such as import quotas, capital controls or tariffs; (x) the possibility that Caterpillar's introduction of Tier 4 emissions compliant machines and engines is not successful; (xi) market acceptance of Caterpillar's products and services; (xii) effects of changes in the competitive environment, which may include decreased market share, lack of acceptance of price increases, and/or negative changes to our geographic and product mix of sales; (xiii) union disputes or other employee relations issues; (xiv) Caterpillar's ability to successfully implement the Caterpillar Production System or other productivity initiatives; (xv) adverse changes in sourcing practices of our dealers or original equipment manufacturers; (xvi) compliance costs associated with environmental laws and regulations; (xvii) alleged or actual violations of trade or anti-corruption laws and regulations; (xviii) additional tax expense or exposure; (xix) currency fluctuations, particularly increases and decreases in the U.S. dollar against other currencies; (xx) failure of Caterpillar or Cat Financial to comply with financial covenants in their respective credit facilities; (xxi) increased funding obligations under our pension plans; (xxii) significant legal proceedings, claims, lawsuits or investigations; (xxiii) imposition of operational restrictions or compliance requirements if carbon emissions legislation and/or regulations are adopted; (xxiv) changes in accounting standards or adoption of new accounting standards; (xxv) adverse effects of natural disasters; and (xxvi) other factors described in more detail under "Item 1A. Risk Factors" in Part I of our Form 10-K filed with the SEC on February 22, 2011 for the year ended December 31, 2010. This filing is available on our website at www.caterpillar.com/secfilings.

Click here to view Caterpillar Inc.'s complete 2nd Quarter 2011 financial results release issued July 22, 2011.

http://www.rns-pdf.londonstockexchange.com/rns/9433K_-2011-7-22.pdf