today posted first quarter 2014 profit per share of $1.44, an increase from $1.31 per share for the first quarter a year ago, in results that topped expectations from Wall Street analysts after some disappointing results last year. Excluding the negative impact for previously announced restructuring costs, profit per share was $1.61. First quarter 2014 sales and revenues, however, were $13.24 billion, essentially flat compared to the first quarter of 2013 revenues of $13.21.
“Given the business and economic uncertainties around the world and continuing decline in our mining sales, I am pleased with our performance in the first quarter,” said Caterpillar chairman and CEO Doug Oberhelman. “We understand we don’t control the economy and have instead focused on what we can improve. We’re lowering costs, improving cash flow and driving value for our customers through the continued deployment of our lean manufacturing initiatives. We see the benefits of these actions in our first-quarter results and in improving market position for many of our products.
“This was a quarter that clearly highlighted the diversity of Caterpillar’s business across industries and regions of the world, and how that diversity continues to help us through the downturn in mining. Both Energy & Transportation and Construction Industries had good results in the first quarter and performed at levels better than we anticipated.”
Caterpillar’s outlook for sales and revenues is unchanged at $56 billion with a range of plus or minus 5 percent. There are some macro-economic and geopolitical uncertainties that could slow the growth of global GDP and impact Caterpillar’s sales, the company said. However, the company is raising its 2014 profit outlook by $0.25 per share. With sales and revenues of $56 billion, the revised outlook including restructuring costs of $0.55 per share is $5.55 per share, higher than the previous outlook of $5.30 per share.
However, the company’s expectations for its Construction Industries division has improved, now expecting a 10-percent increase in sales in 2014. Resource Industries, which includes mining, is expected to drop about 20 percent. However, the company remains optimistic on long-term prospects for the mining industry.
“The change in our profit is a result of our very solid performance in the first quarter, while also recognizing the uncertainty we are facing in a number of areas of our business and the continued risk that geo-political events could negatively impact global GDP growth,” Oberhelman said.
Oberhelman appears guardedly optimistic about conditions in North America.
“In numerous recent discussions with construction customers and our dealers in the United States, I continue to hear positive stories about new projects and reasons for optimism,” he said. “While that’s encouraging, there’s still quite a bit of room for improvement. The U.S. construction industry is still well below its 2006 peak, and we have a real need for infrastructure improvement.”