Shares in bellwether company Caterpillar fall following mixed results
Caterpillar shares fell today after its quarterly results revealed weak sales in the key Asia Pacific region in the first three months of the year.
Read more: Caterpillar shares fall on China slowdown prediction
Shares in the machinery giant were trading down 2.5 per cent at 5.30pm UK time at $138.63 (£107.17), despite the company’s results, released today, showing a rise in profit aided by US tax reform.
The figures
The company’s consolidated profit before tax for the three months to March 31 was $2.26bn, compared to $2.13bn in the same period a year earlier. This figure was boosted by a discrete tax benefit related to US tax reform of $178 million, the company said.
First quarter sales and revenues rose five per cent compared to a year earlier to stand at $13.5bn.
The company’s cash flow from operating activities rose to $1.88bn in the first quarter of the year compared to $1.67 a year earlier.
Profit per share in the first quarter was $3.25, a 19 per cent increase compared with the $2.74 figure of a year earlier.
Why it’s interesting
Caterpillar is the world’s largest heavy duty machinery maker and its results are seen as indicative of the health of global manufacturing activity.
In the first quarter of 2019, the company’s lukewarm performance in the Asia Pacific region indicated that construction activity in China could be about to cool.
Caterpillar’s sales of construction equipment, its biggest area, fell by four per cent in Asia Pacific in the first quarter year-on-year. Caterpillar said a sales decline in the region the impact of a stronger dollar.
Higher costs of labour, material and freight caused profits to fall in the first quarter of the year to $1.09bn, compared to $1.12bn in 2018.
What Caterpillar said
Caterpillar chairman and chief executive Jim Umpleby said: “The global Caterpillar team delivered record first-quarter profit per share.”
Read more: UK construction sector shrinks for second consecutive month
He said: “We are executing our strategy for profitable growth by investing in services, expanding our offerings and improving operational excellence.”