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Global industrial equipment manufacturer Caterpillar reported better than expected first quarter 2019 EPS before the market open Wednesday but warned that China price cutting was hurting despite guiding higher.

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Caterpillar Inc. (NYSE: $CAT) Reported Earnings Before Open Wednesday

$2.94 Missed $2.85 EPS Forecast AND $13.47B Beat $13.40 billion forecast in revenue 

Earnings

Caterpillar Inc. (NYSE: CAT) reported better than expected earnings and revenue on Wednesday. Earnings: $2.94 per share beat expected $2.85 per share, forecast in a survey of analysts by Refinitiv. Revenue of $13.47 billion beat $13.40 billion, forecast by Refinitiv In the year ago quarter, the company reported adjusted earnings per share of $2.82 on $12.9 billion in revenue.

Market Reaction > Caterpillar Inc. NYSE: CAT

Pre-market $137.42 USD −4.86 (-3.42%)

Highlights

Jim Umpleby, CEO of Caterpillar, said, “The global Caterpillar team delivered record first-quarter profit per share. We are executing our strategy for profitable growth by investing in services, expanding our offerings and improving operational excellence.”

  • Caterpillar CFO Andrew Bonfield said the company’s China sales are being hurt by aggressive price competition. While construction demand in China is expected to grow, Bloomberg reported that Bonfield the company may lose a “little bit” of market share in the country.
  • Sales in the Asia Pacific region grew 9% year over year to $3.20 billion.
  • Revenues of the Construction and Resource segments grew 3% and 18% respectively
  • Energy Transportation revenue remained unchanged.
  • There was a 7% increase in the sales of Financial Products. 
  • All the geographical areas, except the EAME region, registered higher revenues during the three-month period.
  • For the full year, however, the company posted record profit of $11.22 a share, up 63 percent from a year earlier.
  • Full-year sales also rose by 20 percent. 

CAT Earnings Q1 19

Outlook

Caterpillar said it now expects full year profit per share between $12.06 and $13.06, citing a tax benefit of 31 cents per share. Caterpillar said its first quarter tax benefit of $178 million stems from U.S. tax reform. The company previously expected $11.75 a share to $12.75 a share.

 Source: CAT, AlphaStreet

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