Caterpillar profits top expectations, lifting shares

Caterpillar profits top expectations, lifting shares

Caterpillar
Caterpillar reported profits of US$1.7 billion for the quarter ending Mar 31, dwarfing the US$192 million in the year-ago period.

NEW YORK: Caterpillar lifted its profit outlook on Tuesday (Oct 24) as recoveries in key mining and construction businesses led to a big jump in third-quarter earnings, boosting shares.

The industrial giant, which manufactures equipment used by energy, construction and infrastructure companies, reported third-quarter net income of US$1.1 billion, up more than three times the level of the year-ago period.

Revenues rose 24.6 per cent to US$11.4 billion.

Caterpillar pointed to especially strong demand in the Chinese construction and North American oil and gas sectors, as well as a broad recovery in the mining industry after a multi-year slump.

"Higher sales volume and our team's focus on cost discipline resulted in improved profit margins across our three primary segments" said Caterpillar chief executive Jim Umpleby.

Caterpillar lifted its 2017 forecast for both revenues and profits, compared with its July outlook. But it also increased its estimate for 2017 restructuring costs to US$1.3 billion from the prior outlook of US$1.2 billion.

The results easily topped analyst earnings estimates due to much stronger than expected pricing of Caterpillar machinery, said a note from Goldman Sachs.

The report "points to structurally improving returns and earnings power," Goldman said.

Shares of Caterpillar jumped 6.0 per cent to US$139.60 in pre-market trading.

Source: AFP/de

Bookmark