Heavy machinery manufacturer Caterpillar reported an earth-moving increase in machinery and engine sales that helped the company nearly double its profits for the second quarter of the year.
The company earned $339 million or $1.15 per share for the quarter, which ended June 30. Those figures are up from $200 million (58 cents per share) during the same period last year. These figures came as a surprise to analysts who expected increases of less than 70 cents per share.
“Political and economic uncertainty continued in the second quarter, but we made significant progress by focusing on areas we could control,” notes Glen Barton, Caterpillar’s chairman and CEO. “We held the gains on revenue yield, controlled costs and continued to produce quality products our customers value.”
Additionally, Caterpillar dealers are reportedly updating their rental fleets, leading to increased machinery sales. However, Barton notes that the company is challenged by changes in federal emissions standards as well as higher pension and health care costs.
Still, Chief Financial Officer Lynn McPheeters notes that Caterpillar has held on to the 2 to 2.5 percent price increases on worldwide machinery and parts that the company passed on to dealers in January.
“My belief is that we’re seeing the customer recognition of the higher value we’ve been putting into the product, that it does command at this point in time some return to Caterpillar,” she comments.
For the first half of the year, Caterpillar’s reported earnings of $528 million ($1.52 per share) as compared to $280 million (81 cents per share) last year.
The author is Assistant Editor of Lawn & Landscape magazine and can be reached at lspiers@lawnandlandscape.com.