Driven by strong growth in its key markets including construction and mining, Caterpillar reported third quarter results that blew past Wall Street’s profit and revenue estimates.
The company’s shares rose as much as 7 percent to a record high of $140.44, helping push the Dow Jones Industrial Average to an all-time high as it sold $11.4 billion in equipment.
Caterpillar is a bellwether for the industrial sector and its third quarter results signal a resurgence in its construction, energy and mining markets, Reuters reported.
The company also raised its full-year forecasts for sales and earnings, expecting revenue in its construction business to surge about 20 percent, and mining business to jump 30 percent.
Profit beat expectations for the sixth straight quarter even after analysts had raised their estimates for July-September period by nearly 30 percent in the past three months. Revenue beat estimates for the third straight quarter.
The construction industry in North America is turning around after years of slow demand, fueled by a steady housing recovery, an improving labor market and higher spending by oil and gas companies.
Sales in North America, Caterpillar’s biggest market, jumped 27 percent in the third quarter ended Sept 30. Construction revenue in the region rose 31 percent, building upon a 3 percent rise in the second quarter after eight quarters of declines.
Sales in Asia-Pacific jumped 57 percent, their seventh quarter of growth, helped by construction demand in China.
While China has been the bright spot for Caterpillar, the pace of growth in the country’s property sector cooled in the third quarter, potentially hurting demand for the company’s iconic yellow earth-moving equipment in the near future.
Excluding restructuring costs, Caterpillar earned $1.95 per share, compared with the average analyst estimate of $1.27 per shares, according to Thomson Reuters I/B/E/S.
Total revenue rose to $11.41 billion, ahead of market estimates of $10.65 billion.
The company said it now expects 2017 sales and revenue of $44 billion, up from its previous forecast of $42 billion to $44 billion. It expects adjusted earnings of $6.25 per share, up from the $5.00.