Caterpillar Beats the Street, Raises FY Forecast



Caterpillar beat analysts’ estimates and raised its full-year forecast for the second time, driven by improving demand in China and a recovery in mining activity. Net income was up from $550 million or 46% to $802 million on revenue of $11.3 billion, up from $10.3 billion a year earlier. Excluding adjustments, Caterpillar earned $1.49 per share, handily beating analysts’ estimates of $1.26 per share.

Caterpillar noted that sales from Asia Pacific, it’s third-biggest market, jumped 23% in the quarter, boosted by an increase in construction equipment sales in China, which is gaining momentum after bottoming out last year.

Sales in North America, its biggest market, were up 7%, largely due to improving demand from the mining and energy industries. The resource industries business, which makes mining equipment, reported the biggest jump in sales in the quarter compared with a year earlier, led by Asia Pacific.

Caterpillar said it now expects 2017 adjusted earnings of about $5 per share, up from the $3.75 it had previously forecast. The company lifted its full-year sales and revenue forecast to a range of $42 billion to $44 billion, from its previous forecast of $38 billion to $41 billion.

“While a number of our end markets remain challenged, construction in China and gas compression in North America were highlights in the quarter,” Chief Executive Jim Umpleby said in a statement. “Mining and oil-related activities have come off of recent lows, and we are seeing improving demand for construction in most regions.”


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