Caterpillar’s earnings soared more than 20 percent in the first quarter, even though revenue slipped, and the construction and mining equipment maker hiked its 2015 earnings forecast well above most expectations.
The company’s profit for the quarter that ended March 31 included a pre-tax gain of $120 million from the sale of its remaining interest in a logistics business. The company also saw a nearly 6 percent drop in operating costs, to $11.18 billion.
Chairman and CEO Doug Oberhelman said in a written statement that Caterpillar’s focus on costs helped during a tough time for some of its cyclical businesses. He noted that Caterpillar’s mining business remained weak, and construction was down in most regions. But operating profit jumped 18 percent to $986 million in the company’s Energy & Transportation segment.
However, Caterpillar expects falling oil prices to hurt sales in that segment during the latter part of the year. Energy & Transportation sells products used in oil and gas production.
Caterpillar also makes engines, industrial gas turbines and diesel-electric locomotives, among other products. It has been cutting costs to counter problems beyond its control like the falling oil prices.
Overall, Caterpillar Inc. earned $1.11 billion, or $1.81 per share, in the first quarter. That compares with $922 million, or $1.44 per share, last year.
Earnings in the latest quarter totaled $1.81 per share, not counting restructuring costs.
Revenue slid 4 percent to $12.7 billion.
Analysts forecast earnings of $1.35 per share on $12.36 billion in revenue, according to the data firm FactSet.
The Peoria, Illinois, company now expects an adjusted 2015 profit of $5 per share, up from its previous forecast for $4.75 per share.
Analysts predict $4.78 per share.
Oberhelman said the company raised its forecast due to its solid first quarter. But they expects sales and earnings for each of the three remaining quarters of the year to be lower than the first quarter, which is usually the most seasonably favorable for costs.
Caterpillar employed 113,322 full-time workers globally at the end of the first quarter, a roughly 3 percent drop compared to last year mainly due to restructuring.
Company shares climbed $1.36 to $86.23 shortly after markets opened Thursday while broader indexes slipped. That eased some of the loss Caterpillar’s stock had registered so far this year. Stock had dropped 7 percent since Dec. 31.