CAT Caterpillar Inc

By Andrew Tangel and Austen Hufford 

Caterpillar Inc. boosted its revenue and outlook for the year as sales for its bulldozers, excavators and other equipment grew in many of its construction markets around the world.

The heavy machinery giant said Tuesday it expects revenue of $42 billion to $44 billion for all of 2017, up from a previous forecast of as much as $41 billion. Caterpillar took in $38.5 billion in revenue last year, its fourth-straight year of declining sales.

Caterpillar said its second-quarter revenue jumped 10% to $11.3 billion from the prior year, fueled by Chinese demand for equipment for infrastructure projects and residential construction, as well as the market for equipment in the North American natural gas industry.

Shares rose about 5% in premarket trading to $113.24.

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

Demand for construction equipment in North America, its largest market, rose 3% in the quarter, but decreased 5% in Europe, the Middle East and Africa. Sales of construction equipment in Latin America rose 31% as several countries' economies showed signs of improvement.

Caterpillar cautioned, however, that it sees remaining weakness in the Middle East and Latin America, as well as geopolitical uncertainty and commodity-price volatility.

Caterpillar saw signs of turnaround in some of its markets in the first quarter. That trend continued in the months since as retail sales of Caterpillar machinery increased 7% world-wide during the three months to the end of June.

Signs of recovery comes after four straight years of revenue decline and waves of layoffs for Caterpillar, which is moving its headquarters to the Chicago suburb of Deerfield from Peoria, Ill.

The company has been working to trim its workforce and shrink its global manufacturing footprint. Caterpillar said it now expects restructuring costs of about $1.2 billion for the year, down from the previously expected $1.25 billion. Caterpillar's full-time workforce declined to 94,800 employees at the end of the second quarter, down from 100,000 the prior year.

In recent months, public attention has focused on a federal investigation involving Caterpillar's taxes, a Swiss subsidiary and export filings.

The Wall Street Journal reported earlier this month investigators believe Caterpillar failed to submit numerous required export filings with the federal government in recent years. Caterpillar has said it believes its tax position is correct, and that the company was in the process of "responding to the government's concerns."

Overall for the second quarter, Caterpillar reported a profit of $802 million, or $1.35 a share, compared with $550 million, or 93 cents a share a year ago.

Excluding restructuring costs, the company said it earned $1.49 a share, compared with $1.09 a year ago.

Analysts polled by Thomson Reuters had expected $1.26 in adjusted earnings per share on revenue of $10.93 billion.

Write to Andrew Tangel at Andrew.Tangel@wsj.com and Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

July 25, 2017 09:49 ET (13:49 GMT)

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