Caterpillar Inc.’s share price up, posts increasing third-quarter profit and boosts full-year earnings projection

The stock of the biggest construction-equipment manufacturer in the world, Caterpillar Inc., rose the most in more than eight months after the companys results during the third fiscal quarter outpaced the analysts profit forecasts. Caterpillar also boosted its full-year earnings projection.

The Chief Executive Officer of the company, Doug Oberhelman, said in a conference call, cited by the Wall Street Journal: “We’ve seen some tremendous improvements” in quality and efficiency.

Caterpillar made an official statement today that its net income over the third financial quarter increased from $1.45 a year ago to $1.63 per share. The U.S.-based company also stated that its profit, excluding one-time items, amounted to $1.72 a share, a result also better than the preliminary estimates by analysts, pointing to $1.35 per share.

The company boosted its forecast for the full year, saying that its earnings, excluding one-time items, will probably amount to $6.50. The latest outlook is 30 cents larger than the preceding one.

Caterpillar said its performance over the third financial quarter was benefited from currency hedges, price increases and stronger railroad locomotives and engines demand. The operating profit of the company is considered to have increased due to its construction-equipment and financing divisions.

Matt Arnold, an analyst at Edward Jones & Co., commented on the companys announcement for Bloomberg: “The beat in the quarter and the raise based on that is mainly the positive. The beat was sizable and the jump in the stock is commensurate.”

Caterpillar stated that it expects its sales over the next year to be “flat to slightly up”. According to its statement, the improvement in office and commercial construction on the territory of North America pushed up the demand for the companys excavators and bulldozers, which also benefited from the gradual increase in residential construction activity.

Caterpillar Inc. was 4.97% up to close at $99.27 per share yesterday, marking a one-year increase of 17.44%. The company is valued at $62.33 billion. According to CNN Money, the 20 analysts offering 12-month price forecasts for Caterpillar Inc. have a median target of $110.00, with a high estimate of $123.00 and a low estimate of $95.00. The median estimate represents a +10.81% increase from the last price of $99.27.