Construction, not mining lifts Caterpillar’s profit
World’s largest maker of heavy machinery Caterpillar (NYSE:CAT) posted Thursday a 5% increase in quarterly profit and raised its 2014 earnings forecast based on a more sustained rebound of its US construction sales.
After beating analysts’ estimates the Illinois-based company now expects this year’s earnings to reach $6.10 per share excluding restructuring costs, up from its previous forecast for $5.85 per share.
Caterpillar said it earned $922 million, or $1.44 per share, in the quarter that ended March 31. That compares to $880 million, or $1.31 per share, last year.
Earnings totalled $1.61 per share, excluding restructuring costs. Total revenue was nearly flat at $13.24 billion.
The company also revealed mining-related sale continue to be low. The machinery maker has been hit especially hard by the slowdown of the past two years, having to lay-off employees and close down plants.
During this first quarter Caterpillar cut over 9,000 jobs, bringing its global workforce to about 132,000.
“Given the business and economic uncertainties around the world and continuing decline in our mining sales, I am pleased with our performance in the first quarter,” said Jim Oberhelman, chief executive.
The firm said warned the political conflict between Russia and Ukraine could escalate, slowing growth and result in government trade sanctions that would hurt sales in the region. However it maintained its expectation for global economic growth to accelerate to 3% this year, from about 2% in 2013, with China growing 7.5%.