Caterpillar to Export Chinese Goods

Caterpillar

, the manufacturer of construction and mining equipment, revealed Thursday that it has started exporting Chinese-made equipment to the Middle East and Africa. According to

, the move is part of a plan to offset a dip in China's economic growth and it is only temporary, with Caterpillar expecting China to remain its fast-growth market. "The global economic situation, especially the situation in China, has presented us a short-term opportunity to serve very specific markets with some supplies over the last half of 2012," Richard Lavin, who oversees Caterpillar's business in China, said. "But that is not part of overall strategy for China." It has been a difficult couple of weeks for Caterpillar, as it gave up gains after releasing its second-quarter earnings.

, Caterpillar reported net income of $1.699 billion from $1.015 billion in the previous year. On a per share basis, the company earned $2.54 versus $1.52 in last year's corresponding quarter. This came in well ahead of analyst consensus estimates of $2.28. Total sales and revenues for the quarter were up 22 percent to $17.37 billion. This also came in ahead of Wall Street revenue expectations of $17.11 billion. Excluding revenues generated by acquisitions, the company's sales were up 12 percent. Looking ahead, Caterpillar said that it expects a full-year profit of $9.60, compared to a prior outlook of $9.50. Around the same time though,

that Caterpillar is insisting on a six-year wage freeze despite making record profits of $4.9 billion last year and projecting even better results for 2012. In addition, the majority of the 780 production workers at the company's Joliet, IL headquarters are subject to a pension freeze. Therefore, it seems like an odd time for the company to turn its attentions to China, which actually only comprises 3 percent of total sales despite concerted and aggressive efforts to grow there. "[This move] will have a positive effect on our industry," Lavin said. "The Chinese government has shown itself to be pretty adept over history at being able to pull the right levers at the right point in time to adjust growth trajectories." Time will tell if it proves to be a good tactic for Caterpillar. On Thursday, Caterpillar traded at about $88.50, up roughly 1.5 percent.