Shares of Caterpillar Inc. (TSX:CAT) were up 1.9% at the bottom of the noon hour on September 18. CEO Jim Umpleby delivered an investor presentation on September 12 and brandied about sales numbers that were up 28% to $55 billion, along with his boast that operating margins had widened by 5%. The stock has increased 33% in 2017 on the back of hopes that the company can rebound from the collapse in commodity prices in 2013-2014.
The company released its second quarter results on July 25. Revenues beat expectations at $11.33 billion which was $1 billion more than Q2 2016. Caterpillar raised its guidance to $5 per share on the year from $3.75 per share due to the earnings beat. Earnings per share were posted at $1.49 compared to $1.26 per share that was expected.
Caterpillar was a big winner in the wake of the 2016 U.S. election result. Not only are corporations excited about the potential of the pro-growth reforms from the Trump administration, but the promise of infrastructure spending and big construction projects has brought big expectations for Caterpillar. The company has already announced strong developments in this regard. Construction industries have seen double digit gains and mining has seen a resurgence under the administration thus far.
Caterpillar has an impressive short history of beating earnings expectations. The stock is rising on big expectations for the third quarter which could result in some overheating for the share price.
