Caterpillar CEO expects record results in 2009
DAVOS, Switzerland (Reuters) - Caterpillar (CAT.N) expects to see record results again in 2009, powered by strong growth in markets outside the United States, its top executive said on Friday.
"We look for another, maybe a challenging year, but we think we will have all-time record results again next year," Jim Owens, chairman and chief executive of the world's biggest maker of earth-moving equipment, told Reuters in an interview.
Earlier on Friday, Caterpillar, a U.S. bellwether, said its sales rose more than 10 percent in the latest quarter, driven by international markets, and it reported record sales and profit for the full year.
"We delivered all-time record sales and revenue and all time profitability in the face of the difficult domestic market. And we did that because we have a very strong global footprint," Owens said.
Owens was in Davos at the annual meeting of the World Economic Forum in the Swiss resort. He struck a very bullish note, thanks to strong growth in emerging markets, adding that financial markets were overplaying worries of a recession in the United States.
"I think if we do have a recession, we will come out of it pretty quickly," Owens said. "The Fed has responded, pretty late maybe, but aggressively, to address the economic weakness. And now the Congress and White House are coming with a fiscal stimulus package.
"So, I expect that the markets we serve will bottom in 2008 and we'll be beginning to see a nice recovery coming into 2009. This is not just an India-China story. This is really a global emerging market story."
Caterpillar predicted 2008 would be another tough year for the U.S. residential housing market -- a key customer for its earth-moving machines -- and predicted recessionary conditions would "persist" in other key markets.
"The risk of a global recession in 2008 is near zero. It's not going to happen. There's too much fundamental strength," Owens said.
"Our basically sold-out positions for the larger end of the product line suggest that big infrastructure projects are going on all around the world, and the same with large engines and these kind of things," he said.
"They are begging for more," Owen said. "We can't build any more."
Owens said he expected an extended economic cycle in mining, energy production, power generation and major infrastructure investments, highlighting robust growth in the cash-rich Middle East, Russia, Eastern Europe and other commodity-driven markets.
"I think we are a good example of the decoupling because we had severe pressure in some very important markets for our sales in the United States in 2007 and yet we had an all-time record year."
(Additional reporting by James Kelleher in Chicago; Editing by Brian Moss)
