Caterpillar Inc. reported first-quarter 2012 sales and revenues of $15.981 billion, up 23% from $12.949 billion in the first quarter of 2011. Profit was a record $1.586 billion in the quarter, an increase of 29% from $1.225 billion in the first quarter of 2011. The improvements were attributed to growth in mining, strong replacement demand for products in the United States and a continued focus on cost management.

Construction Industries
 
Construction Industries' sales were $5.062 billion in the first quarter of 2012, an increase of $591 million, or 13%, from the first quarter of 2011. The improvement in sales was a result of significantly higher sales volume in North America across all major products.
 
In North America and other developed countries, sales increased significantly despite relatively weak but improving construction activity. The improvement in sales was largely driven by the need for customers to upgrade machine fleets to replace older equipment and dealers refreshing equipment in their rental fleets. Despite the increase from a year ago, sales of new machines to customers in developed countries remain significantly below previous peak levels. The size of rental fleets increased slightly from post-recession lows, but the average age remained near the historical high.

Financial Products Segment

The Financial Products business continues to improve with a growing asset portfolio and declining write-offs at Cat Financial. Financial Products' revenues were $761 million, an increase of $31 million, or 4%, from the first quarter of 2011. The increase was primarily due to the impact from higher average earning assets, partially offset by an unfavorable impact from lower interest rates on new and existing finance receivables.
 
Financial Products' profit was $205 million in the first quarter of 2012, compared with $136 million in the first quarter of 2011. The increase, primarily related to Cat Financial, was due to a $36 million decrease in provision expense, an $18 million favorable impact from higher average earning assets and a $13 million favorable impact from higher net yield on average earning assets.

2012 North American Sales Outlook Highlights:

• Stronger sales in North America are expected to about offset reductions in China and Brazil.
• In North America, dealers continue to add significantly to rental fleets. Rental fleet sizes remain below historical highs, and average ages are only down slightly from record highs. Small improvements in construction activity will likely encourage users to continue upgrading their fleets.

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