The industrial juggernaut's profits are impressive, and hiring is way up. Too bad two-thirds of its new jobs are going overseas.
Wall Street got a jolt of good news yesterday when Caterpillar, the world's largest maker of heavy machinery for mining and construction, announced a blockbuster round of third quarter results. The company crushed analyst predictions, posting record revenues that yielded profits 44% higher than a year before. The manufacturer's numbers helped send the Dow Jones Industrial Average up 104 points by the end of trading.
But for those inclined to care less about corporate earnings and more about the broad health of the U.S. economy, Caterpillar's announcement contained plenty of grist for concern. On the bright side, as Bloomberg points out this morning, the company's performance is one more sign that even in difficult times, exports are propping up U.S. growth. Unfortunately, its numbers had little to do with the weak domestic market. Like so many other companies, Caterpillar sees its best prospects abroad. And in that sense, its results captured the good, the bad, and the frightening of the halting U.S. recovery.
Investors pay special attention to Caterpillar, based in Peoria, Ill., because of its particular niche in the global market. The company's bright yellow backhoes, trucks and loaders don't sell unless someone out there is putting up a building or digging a mine--traditional signs of economic activity. So its sales are seen as a global economic barometer.