CAT Caterpillar Inc

By Austen Hufford 

Caterpillar Inc. posted stronger-than-expected growth in revenue and profit and boosted its outlook for the year amid rising demand for its construction equipment.

The Peoria, Ill.-based manufacturing giant now expects revenue of $42 billion to $44 billion this year after previously projecting sales of $38 billion to $41 billion. Caterpillar reported $38.5 billion in revenue in 2016, its fourth straight year of declining sales.

Shares of Caterpillar jumped 4.6% in premarket trading to $113.12.

Chief Executive Jim Umpleby highlighted growth in construction in China and gas compression in North America. He saw improving construction demand in most regions, with mining and oil activities rising from recent lows. Still, he said, a number of the company's end markets remain challenged.

The company saw revenue increases across its three main segments, with much of the overall increase driven by price and volume gains in its construction unit. Geographically, sales rose in North America, Latin America and Asia-Pacific but fell in Europe, Africa and the Middle East region.

In all for the second quarter, Caterpillar reported a profit of $802 million, or $1.35 a share, compared with $550 million, or 93 cents a share a year ago.

Excluding restructuring costs, the company said it earned $1.49 a share, compared with $1.09 a year ago. Revenue increased 9.6% to $11.33 billion.

Analysts polled by Thomson Reuters had expected $1.26 in earnings per share on revenue of $10.93 billion.

The company has been working to trim its workforce and shrink its global manufacturing footprint. Caterpillar now expects restructuring costs of about $1.2 billion for the year, down from the previously expected $1.25 billion. Caterpillar's full-time workforce declined to 94,800 employees at the end of the second quarter, down from 100,000 the prior year. The company's "flexible" workforce increased by 3,500 to 16,400.

Earlier this month, The Wall Street Journal reported that federal investigators believe Caterpillar failed to submit required export filings with the government in recent years. Caterpillar is facing a criminal probe into potential export and tax violations. Caterpillar said at the time that it was responding to the government's concerns. The company hasn't been accused of any wrongdoing.

Write to Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

July 25, 2017 08:41 ET (12:41 GMT)

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