Caterpillar's first-quarter profit jumped 29 percent and it boosted its outlook for the year Wednesday with U.S. construction firms replacing old gear and global demand booming for mining equipment.
The company generated $1.59 billion net income, or $2.37 per share, during the quarter. That's up from last year's $1.23 billion net income, or $1.84 per share.
The Peoria, Ill., firm says its revenue grew 23 percent to $15.98 billion from last year's $12.95 billion.
Caterpillar said it now expects to generate earnings per share of $9.50 in 2012. That's up from a previous prediction of $9.25, but Caterpillar didn't increase its revenue forecast, and that may have pressured the company's stock before the market opened Wednesday. While the company beat most expectations easily, revenue came in a little short.
Analysts had expected the company to report earnings excluding items of $2.13 per share on revenue of $16.22 billion, according to a consensus estimate from Thomson Reuters.
And some unsettling data on durable goods sales may have put a damper on Caterpillar shares as well, which declined more than 2 percent in Wednesday trading.
The Commerce Department reported that orders for fell by the largest amount in three years last month.
While that was mostly because demand for commercial aircraft fell, companies ordered less machinery, and that could be a sign that manufacturing output may slow.
Caterpillar's results are watched closely because they are considered an indicator of industrial activity and the health of the overall economy.
Caterpillar said last year's acquisitions of mining equipment maker Bucyrus International and engine maker MWM Holding provided a $1.1 billion boost to sales during the quarter. That helped offset decreased demand for construction equipment in China and Brazil.
"We're seeing strong global demand for most mining products and significant growth in replacement demand for products in the United States, which more than offset slowing in China and Brazil," Caterpillar Chairman and CEO Doug Oberhelman said.
Last month, Oberhelman told CNBC that he expects 2012 to be another record year for the company, with growth being driven out of new markets such as Eastern Europe, the Middle East, Africa, and China.
Caterpillar officials say they expect the global economy will continue to improve and average 3 percent growth in 2012. The U.S. economy will likely see similar growth levels, but Caterpillar said much of Europe will see little or no economic growth this year.
In China, economic growth may have slowed because of the government's efforts to control inflation, but Caterpillar still predicts 8.5 percent growth there in 2012.