Caterpillar First-Quarter 2017 Revenues Increase First Time in 2 Years

Profits fall on extraordinary restructuring costs – the company expects continued volatility in 2017 – associated with closing the plant in Belgium and production changes at Aurora, IL

Caterpillar operating profit for the first quarter of 2017 fell 15.5% (-$77 million) to $417 million, compared with the first quarter of 2016. Restructuring costs of $752 million in the first quarter of 2017 were primarily related to closure of the facility in Gosselies, Belgium.
Caterpillar operating profit for the first quarter of 2017 fell 15.5% (-$77 million) to $417 million, compared with the first quarter of 2016. Restructuring costs of $752 million in the first quarter of 2017 were primarily related to closure of the facility in Gosselies, Belgium.
Caterpillar Inc.
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Caterpillar’s first-quarter 2017 sales and revenues increased 4% to $9.8 billion, compared with the first quarter of 2016, showing improvement for the first time in ten quarters. First-quarter profit per share was down more than 30% to $0.32. Excluding restructuring costs, first-quarter 2017 profit per share was at $1.28, doubling that of 2016.

“With this momentum, we will continue to focus investment on improving our competitive position by investing in new technologies and improving our productivity to deliver profit growth and shareholder value,” said Caterpillar Chief Executive Officer Jim Umpleby.

2017 Outlook

While Caterpillar is seeing signs of recovery in several of the industries it serves, geopolitical and market uncertainty along with volatility in commodity prices are expected to present continued risks through the year.

In January 2017, Caterpillar provided an outlook range for sales and revenues for the full year of $36 billion to $39 billion with a midpoint of $37.5 billion. The year’s stronger-than-expected start raised company expectations for full-year 2017 sales more than 5% to the range of $38 billion to $41 billion, with a midpoint of $39.5 billion.

Caterpillar reduced its outlook for profit per share nearly 9% to $2.10 at the midpoint of the sales and revenues outlook range. Excluding restructuring costs, profit per share is expected to be about $3.75, which is a 29% improvement at the midpoint of the revised revenue outlook.

Restructuring costs expected in 2017 are significantly higher than the prior outlook primarily due to ongoing manufacturing facility consolidations. The company expects to incur about $1.25 billion of restructuring costs in 2017, an increase of $750 million from the prior outlook, as the current outlook now includes restructuring costs for recently announced actions at manufacturing facilities in Gosselies, Belgium, and Aurora, Ill.

“There are encouraging signs, with promising quoting activity in many of the markets we serve and retail sales to users turning positive for both machines and Energy & Transportation for the first time in several years,” continued Umpleby. “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.”

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