Caterpillar Inc recorded a fivefold surge in profit and raised its forecast for the rest of the year, citing rising demand for its bulldozers, excavators and other heavy equipment.

The world's biggest maker of earth-moving equipment said on Friday it now looks for full-year earnings of $6.25 to $6.75 per share, up from its prior forecast of near $6 and above analysts' expectations.

It also reported first-quarter profit of $1.84 per share, well above the $1.31 Wall Street expected.

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It's a huge number on huge volume, that's the simplest way of describing it, said Eli Lustgarten, an analyst at Longbow Research. He noted that revenue came in more than $1 billion above forecasts.

The report comes a day after government figures showed that economic growth in the United States slowed sharply in the first quarter, with higher food and gasoline prices starting to weigh on consumer spending and sparking concern about inflation.

Commodity inflation is not necessarily bad news for companies including Caterpillar and General Electric Co that make equipment used in energy production and commodity extraction. Rising demand for and prices of metals, coal and oil are driving demand for Caterpillar's heavy equipment -- its sales to miners and other resource companies nearly doubled in the quarter, outpacing its construction equipment business.

We expect that the pace of world economic growth will support continued recovery in the key industries we serve, said Doug Oberhelman, who took the reins as chief executive of the Peoria, Illinois-based company last June.

Caterpillar joins a string of strong earnings reports from industrials ranging from 3M Co to Komatsu Ltd.

Its shares rose 2.8 percent to $115.85 in premarket trading, above their lifetime high on the New York Stock Exchange. As of Thursday's close, they were up 63 percent over the past year, more than four times the pace of the rise in the Dow Jones industrial average, of which Caterpillar is a component.

QUAKE EFFECT

The company reported first-quarter profit of $1.23 billion, compared with $233 million, or 36 cents per share, a year earlier.

Revenue rose 57.2 percent to $12.95 billion, above expectations of $11.69 billion, according to Thomson Reuters I/B/E/S.

Earlier this week Komatsu reported operating profit had doubled, citing demand in China and a recovery in the United States and Europe. The Japanese company said it was unclear what effect Japan's March 11 earthquake, tsunami and nuclear crisis would have on its results this year.

Caterpillar said the aftermath of the Japan quake, which has shaken supply chains around the world, would weigh on its full-year results, pulling down revenue by about $300 million and operating profit by $100 million.

The company is expected to close its $7.6 billion acquisition of mining equipment maker Bucyrus International later this year. Caterpillar officials in March said they might complete the purchase without issuing new shares because of its expected strong profit growth this year.

The company noted that it added 20,813 workers over the past year, about a third of whom work in the United States. That represented a 19.3 percent increase in headcount.

(Reporting by Scott Malone; editing by Robert MacMillan, John Wallace, Dave Zimmerman)

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