By Bob Tita Of DOW JONES NEWSWIRES Caterpillar Inc. (CAT) said Tuesday that global retail sales of its construction and mining machinery rose 21% in the three months to the end of February, as strong sales expansion in North America continued to offset moderating sales growth in other regions. The period was the 22nd straight three-month period of retail sales growth for the world's largest seller of bulldozers, excavators and wheel loaders. But growth has been slowing in most of Caterpillar's geographic market because of tougher year-earlier comparison figures and softening economic growth, particularly in Latin America and Europe. Dealer-reported machinery sales climbed by 27% and 30% from a year earlier for the reporting periods to the end of January and December, respectively. In North America, Caterpillar's largest market, sales rose 39% in the February period, down from a 47% increase in the January period and a 51% increase reported in December. While the recovery in U.S. commercial and residential construction activity remains tepid, Caterpillar's sales have been soaring as equipment users replace worn-out machinery and dealers replenish equipment fleets for their rental businesses. Sales in Europe, Africa and the Middle East were up 13% during the February period, after January sales increased 16% and December sales rose 18%. Europe's ongoing sovereign debt crisis and reductions in government spending have been holding down economic growth on the continent. Sales growth in Latin America continued to soften as well because of slower economic growth. Caterpillar's February period sales from the region rose 6% from a year earlier, after the region logged 13% growth during the January period and a 10% increase in December. Caterpillar dealers face tough year-earlier comparison figures in Latin America. The region had been one of Caterpillar's best-performing geographic markets as construction activity and mining expansion in developing countries such as Brazil drove demand for equipment. In Asia, sales rose 20% during the February period after increasing 25% in the January period and rising 31% in the December period. In Caterpillar's engine business, overall sales rose 13% in the February period, compared with a 22% increase in the January period and an 18% increase in December's. Sales of engines to the petroleum industry grew 22% during the February period, following a 29% increase in the January period and a 33% increase during the December period. Sales of engines for generating electric power weakened from recent months, growing 6% in February after increasing 24% in January and rising 23% in the December period. Engine sales for industrial uses continued to decelerate, falling 1% during the February period, after rising 1% in the January period and climbing 3% in December's. The Peoria, Ill., company created a new transportation category for sales of engines for marine use, highway trucks and railroad locomotives sold by the company's Electro-Motive Diesel unit. Sales of transportation engines rose 22% during the February period after rising 21% in the January period. Caterpillar's stock recently was down 2.6% at $110.81 a share. -By Bob Tita, Dow Jones Newswires; 312-750-4129; robert.tita@dowjones.com
