Caterpillar Revenue Jumps 18.4 Percent in Third Quarter
Caterpillar Inc. posted third quarter 2018 sales and revenues of $13.5 billion, compared with $11.4 billion in the third quarter of 2018, an 18.4-percent increase. Third quarter 2018 profit per share was a company record $2.88, compared to $1.77 per share in the year-ago quarter.
During the third quarter of 2018, operating cash flow for the Machinery, Energy & Transportation division was $848 million.
The revenue increase was the result of higher sales volume driven by improved demand across three primary segments, including an increase in dealer inventories. Favorable price realization, primarily in Resource Industries, contributed to the sales improvement.
“This was the best third quarter profit per share in our company’s history,” said Caterpillar CEO Jim Umpleby. “Our global team continues to do excellent work focusing on our customers’ success and executing our strategy for profitable growth.”
Operating profit for the third quarter of 2018 was $2.135 billion, compared to $1.509 billion in the third quarter of 2017. Manufacturing costs were higher because of increased material and freight costs. Material costs were higher primarily because of supply chain inefficiencies as the industry continues to respond to strong global demand. Selling, general and administrative and research and development expenses increased primarily because of investments aligned with the company’s strategic growth initiatives.
In North America, sales increased 22 percent from $2.165 billion in the year-ago quarter to $2.646 billion in this year's third quarter, with the increase mostly due to higher demand for new equipment, primarily to support oil and gas activities, including pipelines, and non-residential building construction activities. While construction activities remained weak in Latin America (a 5-percent decline), sales increased in Europe, Africa and the Middle East by 10 percent. Sales jumped 10 percent in Asia/Pacific, where sales increased across the region, especially in China.
The Construction Industries segment posted profit of $1.058 billion in the third quarter compared with $884 million in the third quarter of 2017. The increase in profit was a result of higher sales volume, partially offset by higher manufacturing costs. Manufacturing costs were higher because of increased material and freight costs.
For the first nine months of 2018, total sales and revenue was $38.192 billion compared to $30.482 billion in the third quarter of 2017, a 25.3-percent increase.
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.