Caterpillar Inc. (CAT) on Wednesday said first-quarter profit climbed 38 percent as sales of its heavy machinery and engines surged, and the company boosted its revenue and profit expectations for the year.

The results eclipsed the expectations for earnings of $1.36 per share and revenue of $7.3 billion from analysts surveyed by Thomson Financial (search). Shares jumped $4.55, or 5.4 percent, to $89.50.

Caterpillar said the improvement was driven by $1.44 billion of higher volume in its machinery and engines division, $250 million from pricing actions taken to offset increased raw materials costs, a $102 million favorable currency impact that was primarily due to the strengthening euro and British pound and $72 million of higher revenue in its finance segment.

The company raised its outlook for both revenues and profit per share for 2005. Sales of machinery and engines and revenue from financial products are expected to rise a combined 16 to 18 percent. The midpoint of that range puts full year revenue at about $35.45 billion. Revenue totaled $30.25 billion in 2004.

Profit per share is expected to rise 35 to 40 percent from the $5.75 recorded in 2004. Operating profit is expected to increase between $1.02 billion and $1.17 billion above the year-ago's $2.73 billion.