Business

Caterpillar's profits up five-fold as demand improves

Image caption Caterpillar has improved its forecast for the rest of 2011 after releasing its first quarter results

The world's largest maker of heavy equipment, Caterpillar, has increased its profits five-fold thanks to an increase in global demand for its products.

In the first three months of the year the company generated $1,225m (£733m) up from $233m a year ago.

Shares in the US firm closed 3% higher in New York.

Caterpillar said the record quarterly profit was primarily due to selling "significantly" more.

Its products include machinery, engines, electronics and gas turbines used to generate power.

"I am very pleased with our first-quarter results, " said chief executive, Doug Oberhelman.

"Demand continued to improve, we increased production, cost control was excellent, and our operating profit margin improved".

Japan effect

The company has revised its outlook for the rest of 2011 upwards.

Caterpillar now increased its sales forecast from $50bn to $54bn.

It said this was despite, "sporadic production disruptions at many of our facilities" as a result of the earthquake and tsunami that struck Japan last month.

Caterpillar said it expected the upheaval to have a negative impact, particularly in the second quarter, on it sales, factory efficiency and costs.

In the company's trading statement, Mr Oberhelman also paid tribute to two employees who died in the disaster.

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