Ask yourself this…

If the U.S. housing market is at rock bottom, how can heavy-equipment maker Caterpillar, Inc. grow its sales by 13%?

The answer is simple: emerging markets.

In April, Caterpillar (NYSE:CAT) announced surprisingly strong results and a 13% surge in Q1 profits. Caterpillar’s work-around to the U.S. housing crunch is an aggressive push into emerging markets.

Countries such as China, India and Russia contributed to the company’s 30% leap in international sales. By contrast, North American sales rose a paltry 4%. Sales and revenues outside North America represented 58% of total sales and revenues in Q1 — up from 53% of the total a year ago.

Naturally, Caterpillar is increasing its commitment to emerging markets. In addition to China and India, the company is focused on the Commonwealth of Independent States — or the former Soviet Bloc.

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