By Chelsey Dulaney
Caterpillar Inc. raised its profit outlook for the year on
Thursday after reporting better-than-expected earnings in the first
three months of the year.
Caterpillar said it now expects to post per-share earnings of
$5, up from its previous forecast for $4.75 a share in
earnings.
The company affirmed its revenue outlook, but said sales will
remain under pressure for the rest of the year as it continues to
struggle with weak mining and construction activity.
"The first quarter is usually the most seasonally favorable of
the year for costs, and we don't expect the rest of the year to be
as favorable," said Chief Executive Officer Doug Oberhelman in a
release.
The Peoria, Ill.-based company warned in January that the recent
plunge in oil prices would hurt sales of energy-related equipment,
as would a slowing economy in China. It estimated that weak prices
for copper, coal and iron ore that would further slice into sales
of mining equipment, while a stronger dollar hurts sales. The
company has promised further cost-cutting in 2015.
Caterpillar has already reduced its head count and shut many
marginal plants. It plans to move production of some oil pumps and
valves from Illinois to Mexico.
Overall for the period ended March 31, Caterpillar posted a
profit of $1.11 billion, or $1.81 a share, up from $922 billion, or
$1.44 a share, a year earlier.
The quarter was boosted by the sale of its logistics
business.
Excluding restructuring costs, per-share earnings were
$1.86.
Revenue fell 4.1% to $12.7 billion.
Analysts polled by Thomson Reuters had projected $1.35 a share
in earnings and $12.38 billion in revenue.
Caterpillar's order backlog was $16.5 billion at the end of the
quarter, down by $800 million from the end of 2014. The decline was
mainly in the construction and resource industries.
Construction sales fell 7% in the quarter, as resource
industries sales fell 9%. Energy and transportation sales,
meanwhile were flat at $4.8 billion.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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