Should Caterpillar Get More Credit for Its Q1 Report?
Caterpillar released better-than-expected first-quarter financial results before the markets opened on Wednesday.
Caterpillar Inc. (NYSE: CAT | CAT Price Prediction) released its first-quarter financial results before the markets opened on Wednesday. The company said that it had $2.94 in earnings per share (EPS) and $13.47 billion in revenue, which compares with consensus estimates of $2.86 in EPS and $13.46 billion in revenue, as well as the $2.82 per share and $12.86 billion posted in the same period of last year.
Overall, first-quarter sales and revenues increased 5% year over year, while the profit of $3.25 per share was a first-quarter record. This was a 19% increase compared with the previous record first-quarter profit per share of $2.74 in 2018. Note that the profit per share was not adjusted for taxes.
The revenue increase was primarily due to higher sales volume, driven by improved demand for both equipment and services, with the most significant increase in Resource Industries. Sales volume also increased in Construction Industries, while Energy & Transportation was about flat. Sales grew in all regions except for EAME, with the largest gains in North America and Asia/Pacific.
In terms of its segments, Caterpillar reported as follows:
- Construction Industries revenues increased 3% year over year to $5.87 billion.
- Resource Industries revenues increased by 18% to $2.73 billion.
- Energy & Transportation revenues remained flat at $5.21 billion.
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Looking ahead to the 2019 full year, the company expects to see profit per share in the range of $12.06 to $13.06, compared with the previous outlook range of $11.75 to $12.75. Consensus estimates are calling for $12.30 in EPS and $56.75 billion in revenue for the year.
Jim Umpleby, Caterpillar’s board chair and chief executive, commented:
The global Caterpillar team delivered record first-quarter profit per share. We are executing our strategy for profitable growth by investing in services, expanding our offerings and improving operational excellence.
Shares of Caterpillar closed Tuesday at $142.03, in a 52-week range of $112.06 to $161.60. The consensus price target is $143.09. Following the announcement, the stock was down over 2% at $138.40 in early trading indications Wednesday.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
