S&P 500 (NYSE:SPY) component Caterpillar Inc. (NYSE:CAT) reported net income above Wall Street’s expectations for the first quarter. Caterpillar offers construction and mining equipment as well as diesel and natural gas engines and industrial gas turbines.
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Caterpillar Earnings Cheat Sheet for the First Quarter
Results: Net income for Caterpillar Inc. rose to $1.59 billion ($2.37 per share) vs. $1.23 billion ($1.84 per share) in the same quarter a year earlier. This marks a rise of 29.5% from the year-earlier quarter.
Revenue: Rose 23.4% to $15.98 billion from the year-earlier quarter.
Actual vs. Wall St. Expectations: Caterpillar Inc. beat the mean analyst estimate of $2.13 per share. Analysts were expecting revenue of $16.22 billion.
Quoting Management: “These outstanding results demonstrate our continued focus on execution and controlling costs as we increase production and expand capacity to meet increasing demand from our customers. We’re seeing strong global demand for most mining products and significant growth in replacement demand for products in the United States, which more than offset slowing in China and Brazil,” said Caterpillar Chairman and Chief Executive Officer Doug Oberhelman. “During the quarter, I visited Caterpillar facilities, customers, suppliers and dealers around the world, and saw firsthand the progress we are making on safety, product quality, improved delivery times, factory efficiencies and customer service. These improvements have been impressive considering they’ve occurred while we have so much going on-we are building new facilities, expanding existing facilities, integrating acquisitions and continuing the introduction of new products,” Oberhelman added.
For the past five quarters, the company has seen double-digit year-over-year percentage revenue growth. Over that span, the company has averaged growth of 38.6%, with the biggest boost coming in the first quarter of the last fiscal year when revenue rose 57.2% from the year earlier quarter.
The company has now seen its net income increase for three consecutive quarters. In the fourth quarter of the last fiscal year, net income rose 59.8% and in the third quarter of the last fiscal year, the figure rose 44.1%.
Gross margin shrank 0.4 percentage point to 29.7%. The contraction appeared to be driven by increased costs, which rose 24.1% from the year earlier quarter while revenue rose 23.4%.
For three consecutive quarters, the company has topped analyst estimates. It beat the mark by 59 cents in the fourth quarter of the last fiscal year and by 34 cents in the third quarter of the last fiscal year.
Looking Forward: For next quarter, analysts have a more positive outlook about the company’s expected results. The average estimate for the second quarter is $2.31 per share, up from $2.26 ninety days ago. The average estimate for the fiscal year is $9.54 per share, a rise from $9.08 ninety days ago.
(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)
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