Heavy equipment maker Caterpillar signaled the economy is improving Monday with healthy outlook for the year and a sharp rebound from last year's first-quarter loss.
Caterpillar said Monday it generated $233 million, or 36 cents per share, in net income. That compares with a loss of $112 million, or 19 cents per share, last year when the recession and ensuing layoffs weighed down results.
If a $90 million health care tax accounting charge is removed from the most current period, the Peoria, Ill., company would have earned a 50-cent per share profit.
Shares jumped 3 percent before the market opened.
"Economic conditions are definitely improving, particularly in the world's developing economies," Chairman and CEO Jim Owens said. "Industry activity and orders are significantly higher than last year and are at record levels in some areas. As a result, we are hard at work ramping up production to meet increasing demand from customers."
Growth in Asia and Latin America prompted Caterpillar to boost its profit outlook to between $2.50 and $3.25 per share. That's up from $2.50 per share.
The company's yellow-and-black machinery is sold in so many places and used by so many industries, how Caterpillar fares in any given quarter can indicate who healthy the economy is.
Without the financial hit related to the new health care law, Caterpillar easily beat the expectations of analysts surveyed by Thomson Reuters, who were looking for earnings per share of 39 cents.
Caterpillar's revenue fell 11 percent to $8.2 billion, which was short of expectations. Yet the revenue and profit outlook surprised many and company shares jumped $2.22 to $71 in premarket trading.
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