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Caterpillar (CAT) Stock Soars 7% on Q1 Earnings and Revenue Beats
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Shares of Caterpillar Inc. (CAT - Free Report) are surging in afternoon trading, up 7.53% to $104.11 per share, marking its highest price year-to-date, after the company reported first-quarter earnings that doubled Zacks’ estimates.
The farm and construction equipment manufacturer posted earnings of $1.28 per share and revenues of $9.8 billion, beating Zacks Consensus Estimates of $0.62 per share and $9.3 billion in revenue figures.
“Our team delivered outstanding operational performance and, for the first time in more than two years, same quarter sales and revenues increased,” said Caterpillar Chief Executive Officer Jim Umpleby. “We’re also benefiting from our significant cost reduction and restructuring actions.
Sales in all areas of the company increased. Construction, resource, and energy and transportation all showed growth compared to a year ago. Furthermore, the Illinois-based company noted construction growth in Asia, with the majority of high-end user demand in China.
It was not only Caterpillar’s earnings and revenue beats that fueled investors, but also the equipment manufacturer’s positive outlook for 2017.
For 2017, Caterpillar increased its sales guidance range to $38 to $41 billion from $36 to $39 billion. However, the company also expects restructuring costs to go up to $1.25 billion from $500 million, which decreased its profit per share from $2.30 to $2.10. Additionally, Caterpillar expects to continue to see growth in both the U.S. and China markets, while demand in the mining industry should rise along with commodity prices.
While the forecast seems bright, investors should still be cautious.
“There continues to be uncertainty across the globe, potential for volatility in commodity prices and weakness in key markets,” said Umpleby.
Currently, CAT is a #1 (Strong Buy) on the Zacks Rank
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Caterpillar (CAT) Stock Soars 7% on Q1 Earnings and Revenue Beats
Shares of Caterpillar Inc. (CAT - Free Report) are surging in afternoon trading, up 7.53% to $104.11 per share, marking its highest price year-to-date, after the company reported first-quarter earnings that doubled Zacks’ estimates.
The farm and construction equipment manufacturer posted earnings of $1.28 per share and revenues of $9.8 billion, beating Zacks Consensus Estimates of $0.62 per share and $9.3 billion in revenue figures.
“Our team delivered outstanding operational performance and, for the first time in more than two years, same quarter sales and revenues increased,” said Caterpillar Chief Executive Officer Jim Umpleby. “We’re also benefiting from our significant cost reduction and restructuring actions.
Sales in all areas of the company increased. Construction, resource, and energy and transportation all showed growth compared to a year ago. Furthermore, the Illinois-based company noted construction growth in Asia, with the majority of high-end user demand in China.
It was not only Caterpillar’s earnings and revenue beats that fueled investors, but also the equipment manufacturer’s positive outlook for 2017.
For 2017, Caterpillar increased its sales guidance range to $38 to $41 billion from $36 to $39 billion. However, the company also expects restructuring costs to go up to $1.25 billion from $500 million, which decreased its profit per share from $2.30 to $2.10. Additionally, Caterpillar expects to continue to see growth in both the U.S. and China markets, while demand in the mining industry should rise along with commodity prices.
While the forecast seems bright, investors should still be cautious.
“There continues to be uncertainty across the globe, potential for volatility in commodity prices and weakness in key markets,” said Umpleby.
Currently, CAT is a #1 (Strong Buy) on the Zacks Rank
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere
1 billion iPhones in 10 years but a new breakthrough is expected to generate more
than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging
phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may
kick yourself in 2020. Click here for the 6 trades >>