“We achieved this quarter’s results due in great part to the efforts of Caterpillar’s employees, dealers and suppliers who continue to work to remove bottlenecks and increase production for a number of products,” said Caterpillar Chairman and Chief Executive Officer Jim Owens.

Sales and revenues increased $1.540 billion; $1.063 billion from higher sales volume, $290 million from improved price realization, $97 million from the effects of currency and $90 million from higher Financial Products revenues.

Third-quarter profit increased $102 million from third quarter 2005. The increase was largely due to improved price realization and higher sales volume, partially offset by higher costs, including approximately $80 million of expense related to various legal disputes, principally a settlement with Navistar.

Despite the record third quarter, Caterpillar officials lowered their economic forecast for 2007.

Caterpillar expects sales and revenues for 2006 to be about $41 billion, up about 13 percent from 2005, and profit per share to be in a range of $5.05 to $5.30. The previous outlook reflected sales and revenues up 12 to 15 percent and profit per share of $5.25 to $5.50. The decline from the previous outlook was a result of charges related to third-quarter legal disputes, higher core operating costs and slightly lower sales volume.