Caterpillar sees 9.5% sales growth in Q2 2017
Caterpillar revenues rise to $11.3bn in Q2 2017, led by strong growth across its construction, resources and energy/transportation divisions
Caterpillar’s revenues rose by 9.5% to reach $11.3bn in Q2 2017, compared to $10.3bn in Q2 2016, led by strong growth across its construction, extractive, and energy and transportation divisions.
Its Construction Industries revenue grew by $504m to reach $4.9bn, followed by its Resource Industries division, which grew by $302m to reach $1.7bn, and Energy & Transportation, which rose by $191m to hit $3.9bn.
The figures for Caterpillar’s Construction Industries division translated into a growth in operating profit of 64% year-over-year to $901m, while operating profits for Energy & Transportation grew by 16% to $700m.
Geographically, the Asia/Pacific region lead the way in sales for Construction Industries, increasing 44% in Q2 2017 to $1.3bn, amid growing indicators of a recovery in China, followed by Latin America, which grew 31% to $364m.
“Our team delivered an impressive quarter. As demand increased, we continued to control costs and generated higher profit margins,” commented CEO Jim Umpleby.
“While a number of our end markets remain challenged, construction in China and gas compression in North America were highlights in the quarter. Mining and oil-related activities have come off of recent lows, and we are seeing improving demand for construction in most regions.”
Caterpillar’s dealer inventories decreased by roughly $100m in the first six months of 2016 and 2017.
Caterpillar has also revised its revenue forecast to $43bn, or a nearly 9% increase from the previous midpoint outlook of $39.5bn.
However, Caterpillar foresees potentially weaker sales in the Middle East and Latin America in addition to "geopolitical and commodity risk", the company said in a press statement.