Caterpillar surges after beating on earnings and delivering great news about the global economy
- Caterpillar reported first-quarter profit and revenue that topped Wall Street's forecasts.
- The maker of large industrial equipment raised its forecast for earnings this year, as it expects demand from its clients to increase.
- Caterpillar's outlook on the global economy is often used as a temperature check because its equipment is used for massive capital projects.
- Watch Caterpillar trade in real time here.
Caterpillar shares jumped by as much as 4% premarket on Tuesday after the company reported first-quarter earnings that were better than Wall Street had expected.
The maker of giant industrial equipment said it earned $2.82 per adjusted share, topping the forecast for $2.12 according to Bloomberg. Revenue rose 31% year-on-year to $12.9 billion, beating the estimate for $12.04 billion.
Caterpillar raised its full-year guidance because it expects continued economic growth and higher demand for its products. It now expects full-year earnings-per-share to be between $10.25-$11.25 per share, better than analysts' median forecast for $9.27.
"The combination of strength in many of our end markets and our team's continued focus on operational excellence- including strong cost control - helped us deliver improved margins and a record first-quarter profit," Caterpillar CEO Jim Umpleby said in the earnings statement.
Caterpillar's commentary on the global economy is often used as a bellweather because its machinery like excavators and bulldozers are used in massive, expensive capital projects.
The company said it expects the strongest growth in construction to come from North American infrastructure projects and China. The rebound in oil prices should help Latin American economies recover, Caterpillar said.
Caterpillar shares gained 66% over the past year through Monday's market close.