Earnings reports Tuesday continued to suggest the economy is in recovery mode, as Caterpillar, Pfizer and Coca-Cola all reported higher profits for the three months ending in September.

Caterpillar 3-month chart

Caterpillar, the world's largest maker of bulldozers and excavators, came out with earnings that were more positive than expected, even as it reported that profit fell on lower sales. Income was $404 million US, or 64 cents a share, down from $868 million a year earlier.

Analysts had been expecting earnings of five cents a share.

It expected sales worldwide to rebound and lifted its profit forecast for the year to the narrower range of $1.85 to $2.05 from $1.15 to $2.25.

"We believe the third quarter marked the low point for Caterpillar sales and revenues in what has been the toughest recession since the 1930s," CEO Jim Owens said in a statement. "We are seeing encouraging signs that indicate a recovery may be under way."

Its shares rose $2.09, or more than three per cent, to $59.94 in morning trading on the New York Stock Exchange.

Shares in Vancouver-based Finning, the world's biggest dealer of Caterpillar equipment, rose 41 cents to $17.32 Cdn.

Pfizer 3-month chart

Pfizer Inc.'s third-quarter profit rose 26 per cent after cost cutting compensated for a drop in sales. The world's number one pharmaceutical company makes everything from Lipitor, for the treatment of cholesterol, Viagra for impotence, and the smoking cessation drug Chantix.

Its profit was $2.88 billion, up from a year earlier, when the company had a $640-million legal charge over promotion of its painkillers.

New York-based Pfizer said it will keep cutting costs, now that it has completed its takeover, for $68 billion, of Wyeth. Analysts expect the takeover will mean the loss of almost 20,000 jobs.

Shares of Pfizer edged up 24 cents to $18.22 US.

Coco Cola 3-month chart

Results from the Coca-Cola Co. showed a modest rise as the recession cut into sales. The world's biggest beverage maker earned $1.896 billion US, or 81 cents per share, compared with $1.890 billion, or 81 cents per share, a year earlier.

Shares of Coca-Cola fell $1.27, or more than two per cent, to $53.52 in morning trading.