Caterpillar quarter is strongest in decades
Caterpillar Inc. reported its strongest quarterly results in at least four decades Friday, posting 38 percent higher profits as strong demand for its equipment in mining and highway construction helped overcome the impact of a U.S. housing slowdown.
The heavy-equipment maker’s record sales and better-than-expected earnings showed no sign of the weakening in the global economy that some observers have been anticipating.
Caterpillar raised its guidance for the full year following what CEO Jim Owens said was “the best quarter in our history,” concluding Caterpillar’s most profitable first half since 1966.
The company cited particular strength in mining, energy and infrastructure development, which it expects to continue.
Despite the upgrade and exceeding estimates, Caterpillar’s shares fell 73 cents, or 1.1 percent, to close at $68.35 on the New York Stock Exchange.
Analysts said the muted reaction reflected profit-taking because the stock already had risen 20 percent since the start of the year.
Net income rose to $1.05 billion, or $1.52 a share, from $760 million, or $1.08 a share, in the second quarter of 2005. That was 10 cents higher than the average estimate of 12 analysts polled by Thomson Financial.
•RadioShack Corp. said Friday it lost $3.2 million in the second quarter as the electronics retailer posted restructuring and legal settlement costs.
RadioShack’s shares fell 52 cents, or 3.3 percent, to close at $15.24 on the New York Stock Exchange. Since hitting a 52-week high of $27.24 last summer, the stock has steadily declined, hitting a year-low of $13.73 earlier this month.
Quarterly losses amounted to 2 cents a share for the three months ending June 30, compared with a profit of $52.3 million, or 33 cents a share, for the same period a year ago. Revenue edged up to $1.1 billion from $1.09 billion last year.
Fort Worth, Texas-based RadioShack recorded pre-tax charges of $21 million for restructuring activities including lease terminations, store liquidations and other actions, and $8.5 million to settle wage-and-hour class action lawsuits.
•Schlumberger Ltd., the world’s largest oilfield services company, Friday posted a 78 percent jump in second-quarter profit, helped by a strong performance from its seismic-surveys business. Revenue surged 37 percent.
Net income rose to $857 million, or 69 cents a share, in the latest quarter, from $482 million, or 40 cents a share, a year earlier, the New York-based company said.
Excluding charges and credits, second-quarter earnings would have come to 73 cents a share, Schlumberger said. That handily topped the average estimate of analysts polled by Thomson Financial, for quarterly earnings, excluding items, of 63 cents a share.
Revenue in the latest quarter rose to $4.69 billion from $3.43 billion.
The company said growth in North America slowed from the prior quarter as strong results from U.S. land and U.S. Gulf Coast operations were partially offset by a prolonged spring break-up in Canada.
•A massive marketing campaign for its antidepressant Cymbalta along with strong growth of its newer products helped drug maker Eli Lilly and Co. earn $822 million in the second quarter after a loss a year ago that had included a hefty product liability charge.
Net income totaled 76 cents per share for the April-June period compared to a loss of $252 million, or 23 cents per share, a year ago, when it had a charge of 90 cents per share to settle lawsuits about the connection of an anti-psychotic drug, Zyprexa, to diabetes.
Revenue climbed 5 percent to $3.87 billion from $3.67 billion last year.
The results were a penny a share ahead of Wall Street profit estimates and in line with sales expectations, according to a survey of analysts by Thomson Financial.