Finance: Caterpillar posts dynamite earnings but warns of 'geopolitical and market uncertainty'
Caterpillar announced much higher-than-expected earnings for the first quarter of 2017 on Tuesday, and its stock is popping.
Caterpillar announced higher-than-expected earnings for the first quarter of 2017 on Tuesday, and its stock is popping.
The global industrial equipment manufacturer announced adjusted earnings of $1.28 a share, crushing analyst expectations of $0.62 a share.
The company also beat on revenue, generating $9.8 billion against expectations of $9.4 billion.
According to a press release accompanying earnings, the company posted the strong results because of cost-cutting measures.
"We're also benefiting from our significant cost reduction and restructuring actions, which have improved cash flow and further strengthened an already healthy balance sheet," Caterpillar CEO Jim Umpleby said.
While Umpleby said the company was seeing a strong bounceback in key businesses while energy and transportation, the Caterpillar CEO also cited possible uncertainties as negatives for the business.
"While we are raising the full-year outlook for sales and revenues, there continues to be uncertainty across the globe, potential for volatility in commodity prices, and weakness in key markets," Umpleby said.
The possibility of unpredictable political events was echoed in the press release.
"While Caterpillar had strong first-quarter performance and is seeing signs of recovery in several of the industries it serves, geopolitical and market uncertainty along with volatility in commodity prices continue to present risks for the rest of the year," the press release said.
Following the announcement, Caterpillar's stock jumped in premarket trading by $5.09 a share, or 5.26%, as of 7:41 a.m. ET.
Source: New feed
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