Caterpillar share price boosted by strong quarterly report

Caterpillar (NYSE:CAT) has reported a significant 25% jump in revenue in its third quarter 2017 performance report, resulting in a 7% rise in the company’s share price.

The world’s biggest construction and mining equipment supplier smashed past market estimates with Q3 earnings of US$1.95 per share (EPS) on revenue of $11.41 billion. Prior to the report, analysts predicted an EPS of $1.27 on revenue of $10.65 billion.

A key driver of Caterpillar’s dramatically improved performance was an increased demand for heavy equipment from North America and China, particularly from the construction and resources sectors.

Sales of construction equipment, which represented its largest single revenue stream, rose nearly 37% to $4.85 billion, compared to the same quarter in 2016.

The US-based company said: “The increase was primarily due to higher sales volume, with about half due to improved end-user demand and about half due to favourable changes in dealer inventories.

“The improvement in end-user demand was across all regions and most end markets. The favourable change in dealer inventories was primarily due to a decrease during the third quarter of 2016″

In light of its improved Q3 performance, Caterpillar lifted its overall revenue forecast for 2017 for the third time this year, expecting revenue from its construction and mining businesses to rise by 20% and 30% respectively.

@RGNonline