Caterpillar Inc on Tuesday blew past Wall Street`s profit and revenue estimates on surprisingly strong demand for its construction equipment in North America and robust sales in China, pushing its shares up 7 percent in premarket trading.
The company also raised its full-year forecasts for sales and earnings, expecting revenue in its construction business to surge about 20 percent and mining business to jump 30 percent.
The construction industry in North America is turning around after years of slow demand, fueled by a steady housing recovery, an improving labor market and higher spending by oil and gas companies.
Sales in North America, Caterpillar`s biggest market, jumped 27 percent in the third quarter ended Sept 30. Construction revenue from the region rose 31 percent to $2.17 billion and revenue from resources, including mining, rose 28 percent to $581 million.
Construction revenue in Asia Pacific, Caterpillar`s third-biggest, jumped 57 percent to $1.29 billion, boosted by demand from China.
While China has been the bright spot for Caterpillar for several quarters, the pace of growth in the country`s property sector cooled considerably in the third quarter, potentially denting demand for the company`s iconic yellow earth-moving equipment.
Caterpillar`s shares were set to open at an all-time high. They have risen 42 pct this year, compared with an 18 percent increase in the Dow Jones Industrial Average.
The company said it now expects 2017 sales and revenue of $44 billion, up from its earlier forecast of $42 billion to $44 billion. It expects adjusted earnings of $6.25 per share, up from the $5.00.
Net profit rose nearly four-fold to $1.06 billion.
Excluding restructuring costs, Caterpillar earned $1.95 per share, compared with the average analyst estimate of $1.27 per shares, according to Thomson Reuters I/B/E/S.
Total revenue rose to $11.41 billion, ahead of market estimates of $10.65 billion.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)