Caterpillar reports better-than-expected Quarterly Profit
Quarterly profit for Caterpillar Inc has turned out to be better than expected. The company reported on Thursday that lower sales didn’t have much impact on the quarterly profit as the margins remained strong. However, the outlook for the rest of the year is not very promising. The outlook was based on the strong US dollar, weak oil prices and geopolitical tensions.
However, the company succeeded in maintaining its sales outlook for the year and had no hesitation in raising its 2015 earnings per share outlook, though slightly. An announcement for the same helped lift shares more than 4% in the Peoria, Illinois-based company.
The cost of imported goods was reduced in the first quarter by the strength of the dollar, said Caterpillar. The cost reduction in the imported goods particularly came from Japan. A pre-tax gain of $120 million from the sale of a third-party logistics business was also reported by the company.
Sales and profit for the remaining three quarters of the year are expected to stay lower than the reporting period just ended, said the world's largest construction and mining equipment maker.
The first-quarter net income was reported by Caterpillar to be of $1.11 billion or $1.81 per share. It was 20% higher than $922 million or $1.44 per share a year earlier. Earnings per share were calculated to be $1.86 after excluding restructuring costs.
Caterpillar saw slightly higher sales in energy and transportation business, but the company believes that the trend is unlikely to continue amid low oil prices.
“We continue to face headwinds and uncertainty in 2015, and our outlook for the year reflects that. We expect sales and profit in each of the remaining three quarters of 2015 to be lower than the first quarter”, said chief executive officer Doug Oberhelman in a statement.
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