Caterpillar Inc. 3Q 2007 Earnings Release

Caterpillar Reports Record Quarterly Sales and Revenues; Best Ever Third-Quarter Profit Per Share, Up 23 percent

Preliminary 2008 outlook for sales and revenues up 5 to 10 percent, profit per share up 5 to 15 percent

PEORIA, Ill.— Citing continued strength in markets outside of the United States, Caterpillar Inc. (NYSE: CAT) today announced third-quarter sales and revenues of $11.442 billion, an all-time quarterly high. The company also reported profit of $927 million, or $1.40 per share, for the quarter ended September 30, 2007. Profit and profit per share are the highest ever for a third quarter.

“These results clearly demonstrate our global reach and the stability and strength of our growing integrated service businesses. We delivered strong returns for our stockholders despite continuing severe weakness in key U.S. markets,” said Chairman and Chief Executive Officer Jim Owens. “I am particularly pleased by the bottom line results of our engines business. With our extensive product offering and the continuing strength in most end markets, we were able to more than offset the impact of the dramatic drop in on-highway truck engines and report record operating profit for engines. Overall, profit per share climbed 23 percent compared to last year’s third quarter, and moving forward I am confident that our deployment of the Cat Production System (CPS) will help us reach our 2010 goals for improving safety, quality, velocity, earnings and growth,” said Owens.

Sales and revenues increased $925 million compared to the third quarter of last year, $385 million from higher sales volume, $267 million from improved price realization, $174 million from the effects of currency and $99 million from higher Financial Products revenues.

Third-quarter profit increased $158 million, or $0.26 per share, from third quarter 2006. The increase in profit was due to improved price realization and higher sales volume, partially offset by higher manufacturing costs, including material costs.

“Despite weakness in U.S. markets, our sales and revenues increased 9 percent. We continue to see remarkable growth outside of the United States with particular strength in key industries like mining, oil and gas, electric power and marine engines. The industries we serve are becoming increasingly global, and the investments we are making to achieve our 2010 goals have us well positioned to meet their needs,” said Owens.

Outlook

The full-year outlook for 2007 is for sales and revenues of about $44 billion and profit per share in the range of $5.20 to $5.60, compared to $5.17 per share in 2006. The previous outlook for 2007 sales and revenues was about $44 billion, and profit per share was $5.30 to $5.80.

Caterpillar’s preliminary outlook for 2008 reflects a sales and revenues increase of 5 to 10 percent and profit per share up 5 to 15 percent from the mid-point of the 2007 outlook range.

“I am pleased with our progress on improving safety and quality. While we continue to face capacity-related inefficiencies due to the unprecedented surge in global demand, I am confident that CPS with 6 Sigma will deliver the velocity and efficiency improvements needed to achieve our 2010 goals—sales and revenues more than $50 billion and compound annual growth in profit per share of 15 to 20 percent from our 2005 base,” said Owens.

Note: Glossary of terms included on pages 21-22; first occurrence of terms shown in bold italics.

For more than 80 years, Caterpillar Inc. has been making progress possible and driving positive and sustainable change on every continent. With 2006 sales and revenues of $41.517 billion, Caterpillar is the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines. The company also is a leading services provider through Caterpillar Financial Services, Caterpillar Remanufacturing Services, Caterpillar Logistics Services and Progress Rail Services. More information is available at http://www.cat.com.

Caterpillar contact: Jim Dugan, Corporate Public Affairs, (309) 494-4100 (Office) or (309) 360-7311 (Mobile)

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