Caterpillar Inc. has released its results for 1Q17, announcing sales and revenues of US$9.8 billion, compared with US$9.5 billion in 1Q16. 1Q17 profit per share was US$0.32, compared with US$0.46 per share in 1Q16. Excluding restructuring costs, 1Q17 profit per share was US$1.28, double 1Q16 profit per share excluding restructuring costs of US$0.64 per share.
“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, which have improved cash flow and further strengthened an already healthy balance sheet. With this momentum, we will continue to focus investment on improving our competitive position by investing in new technologies and improving our productivity to deliver profit growth and shareholder value.”
While Caterpillar had strong first-quarter performance and is seeing signs of recovery in several of the industries it serves, geopolitical and market uncertainty along with volatility in commodity prices continue to present risks for the rest of the year.
In January 2017, Caterpillar provided an outlook range for sales and revenues for the full year of US$36 billion to US$39 billion with a midpoint of US$37.5 billion. As a result of a stronger than expected start to the year, the company’s expectations for FY17 sales and revenues have increased. The current sales and revenues outlook is now a range of US$38 billion to US$41 billion with a midpoint of US$39.5 billion.
For the full year of 2017, Caterpillar expects profit per share of about US$2.10 at the midpoint of the sales and revenues outlook range, or about US$3.75 per share excluding restructuring costs. The previous outlook for 2017 profit per share was about US$2.30 per share at the midpoint of the sales and revenues outlook, or about US$2.90 per share excluding restructuring costs.
Restructuring costs expected in 2017 are significantly higher than the prior outlook primarily due to ongoing manufacturing facility consolidations. The company expects to incur about US$1.25 billion of restructuring costs in 2017, an increase of US$750 million from the prior outlook, as the current outlook now includes restructuring costs for recently announced actions at manufacturing facilities in Gosselies, Belgium, and Aurora, Illinois.
“There are encouraging signs, with promising quoting activity in many of the markets we serve and retail sales to users turning positive for both machines and Energy & Transportation for the first time in several years,” continued Umpleby. “While we are raising the full-year outlook for sales and revenues, there continues to be uncertainty across the globe, potential for volatility in commodity prices, and weakness in key markets.”
The 2017 outlook does not include a mark-to-market gain or loss for remeasurement of pension and OPEB plans.
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