Caterpillar’s Sales Surge

Caterpillar is the largest maker of construction and mining equipment. Strong housing markets in the US and China, strengthening global demand and the recovery in commodities prices lifted Caterpillar’s surging adjusted profit and sales past analysts’ estimates. Caterpillar crushed Wallstreet’s targets.

The heavy machinery maker’s adjusted profit nearly tripled in the latest quarter with a 30% surge in revenue. William Blair, an analyst said, “Caterpillar reported a solid fourth quarter, beating consensus expectations or sales and earnings.”

Construction demand compounded earnings growth last year; and now strengthening global demand and the commodities price rebound have lifted the outlook for its two other divisions – resource industries and energy and transportation. Rising gold and copper prices are boosting the demand for Caterpillar mining equipment and increasing crude oil prices are driving sales of oil and gas mining equipment. Sales for machinery for resource industries was up 8%, sales of construction machinery were up 15% and energy and transportation equipment sales were up 5%. As a result, Caterpillar raised its adjusted profit outlook for the full year. For the quarter, it posted a net loss due to changes in the tax law. Excluding that, its adjusted profits surged. Caterpillar’s shares have been on a tear and were up 75% over the past 12 months.

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6 years ago