LOS ANGELES Caterpillar Inc (CAT.N), the world's largest U.S. maker of construction and mining equipment, said on Tuesday it is raising product prices by as much as 5 percent due in part to surging demand.
The company, which has seen demand for its mining equipment jump as a result of rising commodity prices, said in a regulatory filing that the action "is a result of current general economic conditions and industry factors.
Caterpillar spokeswoman Rachel Potts said that "as a whole, this price action represents an upward adjustment for Caterpillar machinery and engines," but added that "there are some models in certain regions that may not require an adjustment in price."
Jim Owens, the company's chief executive and chairman, told Reuters last month that commodity prices are "above what's sustainable in the long term" and could lead to an investment bubble as damaging as the one that hit the U.S. housing market. He warned that Caterpillar might raise prices to recoup its costs, including higher steel costs.
The company's earnings have been buoyed by fast-growing overseas sales and strong demand from the oil and mining industries, even as a weak U.S. economy and housing slowdown have stalled domestic sales of equipment and engines.
The Reuters-Jefferies CRB index .CRB of 19 commodity futures, which fell 0.5 percent to close at 384.93 on Tuesday has trended lower over the past couple of weeks, but is still up nearly 30 percent from the 12-month low set in August.
Caterpillar said price details by product will be released to dealers in the coming weeks and will vary across geographic regions and products.
The shares of the equipment maker, which rose $1.69, or 2.2 percent, to close at $79.98 on the New York Stock Exchange, were slightly higher at $80.10 in after hours trading. The stock has gained about 10 percent so far this year.
(Reporting by Deena Beasley; Editing by Leslie Gevirtz/Andre Grenon)