The performance of the world's largest maker of construction and mining equipment is an indicator of the strength of the global economy. Along with strong fourth-quarter earnings, Caterpillar issued rosy guidance for this year, saying it expects economic conditions and construction activity to continue to improve in most parts of the world.

Caterpillar, based in Peoria, Illinois, reported net income of $1.55 billion, or $2.32 per share, up from $968 million, or $1.47 per share, in the same quarter last year.

Sales and revenue jumped 24 percent to $17.24 billion from $12.81 billion.

The results easily topped Wall Street predictions.

Analysts polled by FactSet expected profit of $1.76 per share on $15.95 billion in revenue.

Caterpillar expects the global economy to grow about 3.3 percent this year, with the US economy growing by at least 3 percent. In addition, US construction spending, which has been on the decline since 2004, should finally begin to recover, the company said.

The company warned that while Europe's economic crisis probably won't trigger a global recession, economic growth in euro zone counties probably won't improve until the second half of this year.

Caterpillar sees China's economy growing by 8.5 percent in 2012, with more construction and rising demand for commodities bringing more machine sales.

Caterpillar estimates its 2012 profit will be $9.25 per share with $68 billion to $72 billion in revenue.

The outlook includes about $6 billion in revenue from two acquisitions it made in 2011 — Bucyrus International Inc. and Motoren-Werke Mannheim Holding GmbH.

Analysts polled by FactSet expect profit of $9.07 per share on $66.99 billion in revenue for Caterpillar this year.

The company said sales of new machines and equipment will improve as customers in developed counties rebuild their fleets.

Low interest rates and the expected increase in construction activity are also expected to boost demand.

In addition, Caterpillar expects demand for its mining equipment to continue to be strong globally, as companies keep boosting capacity.

For the full year 2011, Caterpillar earned $4.93 billion, or $7.40 per share, up from $2.7 billion, or $4.15 per share, in 2010.

Sales and revenue increased to $60.14 billion from $42.59 billion.

Excluding its acquisition of Bucyrus, which closed during the year, Caterpillar earned $7.79 per share and posted $57.61 billion in sales.