Caterpillar posted first quarter 2017 sales and revenues of $9.822 billion compared with $9.461 billion in the first quarter of 2016, a 3.8-percent increase. First quarter 2017 profit per share was $0.32 compared with $0.46 in the first quarter of 2016. Excluding restructuring costs, first quarter profit per share was $1.28, double first quarter profit per share excluding restructuring costs of $0.64 in the first quarter of 2016.
While Caterpillar had a 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 remainder of this year.
“Our team delivered outstanding operational performance and, for the first time in more than two years, same quarter sales and revenue increased,” said Caterpillar CEO Jim Umpleby. “We’re also benefiting from our significant cost reduction and restructuring actions, which will 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.”
The company’s revenue increase stemmed from higher sales volume, with the most significant increase in Resource Industries because of higher end-user demand for after-market parts. Sales volume for Energy & Transportation increased slightly because of after-market parts for reciprocating engines. Construction Industries’ sales volume was about flat, Caterpillar said.
Sales increased in Asia/Pacific and Latin America, but were about flat in North America and Europe, Africa and the Middle East. Asia/Pacific sales jumped 12 percent primarily because of an increase in construction equipment sales in China resulting from increased infrastructure and residential investment. Higher commodity prices and increased mining production favorably impacted demand for after-market parts in Australia. Sales jumped 14 percent in Latin America primarily because of stabilizing economic conditions in several countries in the region that resulted in improved end-user demand from low levels. In North America, sales were flat as higher demand for after-market parts was offset by lower end-user demand for new equipment. Also there was an unfavorable impact of changes in dealer inventories as dealers increased inventories more in the first quarter of 2016 than in the first quarter of 2017.
Also, increased demand in North America for oil and gas applications was offset by lower sales for infrastructure construction equipment.
About the Author
Michael Roth
Editor
Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a professional journalist. Roth has visited hundreds of rental centers and industry manufacturers, written hundreds of feature stories for RER and thousands of news stories for the magazine and its electronic newsletter RER Reports. Roth has interviewed leading executives for most of the industry’s largest rental companies and manufacturers as well as hundreds of smaller independent companies. He has visited with and reported on rental companies and manufacturers in Europe, Central America and Asia as well as Mexico, Canada and the United States. Roth was co-founder of RER Reports, the industry’s first weekly newsletter, which began as a fax newsletter in 1996, and later became an online newsletter. Roth has spoken at conventions sponsored by the American Rental Association, Associated Equipment Distributors, California Rental Association and other industry events and has spoken before industry groups in several countries. He lives and works in Los Angeles when he’s not traveling to cover industry events.