Caterpillar Sees Signs of Recovery--Update
April 25 2017 - 9:15AM
Dow Jones News
By Joshua Jamerson
Caterpillar Inc., suffering from years of declining sales and
soft demand for its bright yellow machines, said it is seeing signs
of recovery in several of the industries it serves and boosted its
revenue and profit forecasts for the year.
The bullish take from Caterpillar comes after the company on
Monday reported in a regulatory filing that retail sales world-wide
increased 1% during the three months ended in March, the first
increase since 2012. The company said Tuesday its results for the
first three months of the year marked the first time sales and
revenue grew year-over-year in more than two years.
Shares, which have climbed more than 4% so far this year, added
another 6.2% premarket.
The Peoria, Ill.-based heavy-equipment giant has been slashing
costs amid sliding sales, as miners shelved equipment-buying plans
as commodity prices fell, and the oil bust in 2014 weakened demand
for related equipment. But on Tuesday the company raised its
revenue outlook to a range of $38 billion to $41 billion, up from
its range given in January of between $36 billion and $39
billion.
"There are encouraging signs," said Chief Executive Jim Umpleby.
He said there is promising activity in many of the markets
Caterpillar serves. But he also warned that there is "uncertainty
across the globe, potential for volatility in commodity prices, and
weakness in key markets."
Mr. Umpleby added that the company's results show it is reaping
the benefits of cost cuts and restructuring, which he said have
improved cash flow and helped strengthen the balance sheet.
Caterpillar also said it now anticipates restructuring costs of
about $1.25 billion in 2017, about $750 million higher than
previously expected, primarily due to manufacturing facility
consolidations.
Caterpillar now sees profit per-share coming in near $3.75,
excluding restructuring costs, much better than its prior guidance
of $2.90.
Over all for the first quarter, Caterpillar reported a profit of
$192 million, or 32 cents a share, compared with $271 million, or
46 cents a share a year ago. Excluding restructuring costs, the
company said it earned $1.28 a share. Total sales and revenues rose
to $9.82 billion from $9.46 billion a year ago.
Analysts polled by Thomson Reuters anticipated per-share
earnings of 62 cents on revenue of $9.27 billion.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
April 25, 2017 09:00 ET (13:00 GMT)
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