Caterpillar posted $12.859 billion in sales and revenue in its first quarter, compared to $9.822 billion in the first quarter of 2017, a 30.9-percent increase. First quarter 2018 profit of $2.74 per share was a first quarter record.
During the first quarter, Machinery, Energy & Transportation’s operating cash flow was $948 million and the company repurchased $500 million of Caterpillar common stick. The company ended the first quarter with an enterprise cash balance of $7.9 billion.
“I’d like to thank our global Caterpillar team for outstanding results,” said Caterpillar CEO Jim Umpleby. “The combination of strength in many of our end markets and our team’s continued focus on operational excellence – including strong cost control – helped us deliver improved margins and a record first-quarter profit.”
In January, Caterpillar provided a 2018 profit outlook of $7.75 to $8.75 per share. The company is increasing its 2018 profit outlook by $2 per share to a range of $9.75 to $10.75 per share, because of growing demand for products and services. The revised outlook range for adjusted profit is $10.25 to $11.25 per share.
“Based on our strong first-quarter results and higher demand across all regions and most end markets, we are raising our outlook for 2018,” said Umpleby. “We will continue to make targeted investments in expanded offerings and services, consistent with our strategy for long-term profitable growth.”
In its Construction Industries division, Caterpillar expects broad-based growth in all regions in 2018, with the biggest drivers being continued strength for construction activity in North America and infrastructure development in China. The company expects Europe, Africa and the Middle East to grow amid high business confidence in stability in oil-producing countries. The recovery that started in Latin America is expected to continue.
In Resource Industries, the company expects global economic conditions and favorable commodity price levels will drive miners to increase capital expenditures in 2018 for both equipment replacement cycles and expansions. Higher machine utilization levels should support after-market parts growth. Strong global demand for commodities is also expected to be a positive for heavy construction and quarry and aggregate customers.
In the Energy & Transportation division, sales into oil and gas applications are expected to increase in 2018, led by continued strong demand for reciprocating engines for well servicing and gas compression applications in North America. After a multi-year downturn, the company expects power generation sales to increase as global economic conditions improve. Sales of engines into industrial applications are expected to improve in 2018, primarily because of projected demand in Europe, Africa and the Middle East.
Caterpillar’s largest sales increase was in North America, which improved 33 percent as strong economic conditions in key end markets drove higher end user demand. Asia Pacific sales jumped 44 percent because of increased end user demand, primarily for construction equipment in China, the impact of favorable changes in dealer inventories and a stronger Chinese yuan.