Caterpillar (NYSE: CAT) stock surged Tuesday morning after the company's first-quarter earnings came in well above economists' expectations.
Earnings proved $2.82 per share vs. $2.13 per share forecast by Thomson Reuters. Revenue was $12.9 billion vs. $12.1 billion forecast.
The Illinois-based machinery manufacturer raised its 2018 profit outlook by $2.00 compared to the previous quarter, to a range of $10.25 to $11.25 per share. The rosier guidance exceeds economists' expected range of between $8.39 and $10.60 a share. The company cited better-than-expected sales volume as the main driver of its improved full-year guidance.
Increased volume also drove the company's total sales up 38% from the year-ago quarter, to $5.7 billion. Caterpillar also repurchased $500 million of common stock in the first quarter of 2018
CEO Jim Umpleby said, "The combination of strength in many of our end markets and our team's continued focus on operational excellence — including strong cost control — helped us deliver improved margins and a record first-quarter profit.”
The company added 10,900 jobs year-over-year, bringing its worldwide total to 118,800.
While Caterpillar's stock has slipped about 2% in 2018 so far, the company is well-positioned to benefit from a construction sector boom in China, Citigroup said in a note on Monday, upgrading the manufacturers' shares to buy from neutral.
CAT stock climbed $4.14, or 2.7%, to $158.15
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