US Economy

Caterpillar quarterly sales up for 1st time in 2-1/2 years

Caterpillar reported its first jump in quarterly sales in two-and-a-half years Tuesday and said it was heartened by increased customer inquiries in prospective equipment purchases in key sectors.

Shares of Caterpillar rose sharply in pre-market trading on the report as both earnings and revenues bested analyst expectations by wide margins
Shares of Caterpillar rose sharply in pre-market trading on the report as both earnings and revenues bested analyst expectations by wide margins (AFP)

NEW YORK - Caterpillar reported its first jump in quarterly sales in two-and-a-half years Tuesday and said it was heartened by increased customer inquiries in prospective equipment purchases in key sectors.

Shares of the large machinery giant rose sharply in pre-market trading on the report as both earnings and revenues bested analyst expectations by wide margins.

Still, the report was not entirely upbeat. The company announced $750 million in additional restructuring costs associated with shuttered facilities.

The manufacturer has been downsizing and closing factories over the last two years due to a bruising downturn in mining, and now expects $1.3 billion in restructuring costs in 2017.

"There are encouraging signs, with promising quoting activity in many of the markets we serve and retail sales to users turning positive for both machines and Energy & Transportation for the first time in several years," chief executive Jim Umpleby said.

"While we are raising the full-year outlook for sales and revenues, there continues to be uncertainty across the globe, potential for volatility in commodity prices, and weakness in key markets."

Net income came in at $192 million, down 29.2 percent from the year-ago period.

Revenues were up 3.8 percent to $9.4 billion.

The increase in restructuring costs was due to closing a manufacturing facility in Gosselies, Belgium, costing 2,000 jobs. Caterpillar also will consolidate some manufacturing operations in the United States.

Shares of Caterpillar jumped 5.7 percent to $102.36 in pre-market trading.