Caterpillar share price jumps after bulldozing expectations and upping forecasts

 
Oliver Gill
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The return of demand from China has been pivotal to Caterpillar's success, the firm said (Source: Caterpillar)

Caterpillar, the world's largest construction equipment firm, walloped expectations and raised annual forecasts for the second time this year.

The US giant said Chinese demand reached its nadir in 2016 and was now gaining momentum. Shares in the New York listed firm jumped nearly six per cent in the wake of the announcement.

Second quarter sales were $11.3bn (£8.7bn), up from $10.3bn in 2016, with earnings per share rising to $1.35 from $0.93.

Caterpillar admitted "some risks remain" but upped its full-year outlook for 2017. It expects mid-point revenues of $43bn compared with previous guidance of $39.5bn.

Read more: Caterpillar reveals first sales growth for years

Chief executive Jim Umpleby said the firm had managed to control costs and generate higher profit margins.

“While a number of our end markets remain challenged, construction in China and gas compression in North America were highlights in the quarter," he said.

Given our performance in the first half of the year and current quotation and ordering activity, we are confident in raising our full-year 2017 outlook.

A Thomson Reuters poll of analysts expected second quarter revenues of $10.9bn and earnings per share of $1.26.

Read more: Caterpillar’s revenues take a hit as the drop in commodity prices weighs

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