Caterpillar ups profit outlook on doubling Q1 headline profit, record earnings
VANCOUVER (miningweekly.com) – Global mining and construction equipment manufacturer Caterpillar has reported record first-quarter profit as strength in many of its end-markets and a strong emphasis on cost control boosted margins.
The Deerfield, Illinois-based company reported adjusted profit of $2.82 a share – up 120% compared with $1.28 a share a year earlier. This beat the average analyst forecast for earnings a share of $2.07.
Revenue for the three-month period ended March 31 also jumped 31.63% year-on-year to $12.9-billion, compared with $9.8-billion in the comparable period of 2017.
Caterpillar increased its full-year profit outlook by $2 to a range of $9.75 to $10.75 a share, on the back of strong and growing demand for its products and services. The company advised that the outlook includes about $400-million of restructuring costs – unchanged from the previous January outlook. The revised outlook range for adjusted profit is $10.25 to $11.25 a share, Caterpillar said.
The company cited better-than-expected sales volume as the main driver of the raised profit outlook, with higher volumes expected across the three primary business segments when compared with the prior outlook. The business units comprise the construction industries, the resource industries and the energy and transportation unit.
The manufacturer pointed out that improved price realisation is expected to be partially offset by material cost increases, as a result of higher commodity prices. However, despite the anticipated increase in volume, the company expects period costs, excluding a short-term incentive compensation expense, to be in line with the previous outlook.
Caterpillar expects global economic confidence and higher commodity price levels to prompt miners to increase capital expenditure this year, for both equipment replacement cycles and expansions. Higher machine utilisation levels should also support aftermarket parts growth. Strong global demand for commodities is also expected to be positive for heavy construction and quarry and aggregate customers, the company said.
Cat Financial also reported first-quarter financial results on Tuesday, saying revenues jumped $28-million to $690-million, an increase of 4%, compared with the first quarter of 2017. Profit was 21% lower year-on-year at $91-million.
Despite a somewhat bloody first quarter for Caterpillar’s NYSE-listed equity, the stock had gained about 70% in value to $157 apiece on Tuesday, since it reached a low of about $90 a share in early 2017. Shares jumped as much as 4.6% in early trading on Tuesday to $161.10 apiece, before falling back to $155.62 a share by noon.
Comments
The
content
you are trying to access is only available to subscribers.
If you are already a subscriber, you can Login Here.
If you are not a subscriber, you can subscribe now, by selecting one of the below options.
For more information or assistance, please contact us at subscriptions@creamermedia.co.za.
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation