Caterpillar's 2Q Earnings Rise; Engine Maker Boosts Outlook

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eavy equipment and engine maker Caterpillar Inc. said Thursday its second-quarter income rose to $760 million or $1.08 a share, from $566 million or 80 cents last year.

img src="/sites/default/files/images/articles/caterpillarlogo.gif" width=120 align=right>Caterpillar said the profit was led by increased sales, with revenue rising to $9.36 billion, up 23% from $7.58 billion in the same quarter last year.

Caterpillar also raised its 2005 sales and revenue outlook to $33.44 billion to $34 billion, and boosted its profit outlook to $4 to $4.20 a share. Previously, it had predicted a profit of $3.89 to $4.03 per share on sales of $32.87 billion to $33.44 billion

By segment, sales of machinery grew 25% to $6 billion, engines increased 22% to $2.8 billion and financial products expanded 19% to $576 million, Caterpillar said.

It said rising raw-material costs drove an expected increase in core operating expenses. Caterpillar had said March 1 it would raise its engine prices by as much as 5% this year, due to higher raw materials prices, including steel.

The company split its stock 2-for-1 on July 13 and boosted its dividend by 9 cents, to 50 cents, following record sales last year. (Click here for previous coverage.)