Caterpillar Inc. posted stronger-than-expected revenue and profit growth and boosted its outlook for the year amid rising demand for its equipment across the globe.
Shares jumped 7% in premarket trading as the company said there was increased demand for its products throughout many of its industries and regions and investors hoped the company could finally end a multiyear sales slump.
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The Peoria, Ill., manufacturing giant now expects revenue of $44 billion this year, up from $42 billion to $44 billion previously. Caterpillar reported $38.5 billion in revenue in 2016, its fourth straight year of declining sales.
On the profit front, the company said the higher revenue and cost cuts will drive greater bottom-line growth. For the full year, the company now expects adjusted profit-per-share of $6.25, up from $5 previously.
Chief Executive Jim Umpleby highlighted growth in construction in China, onshore oil and gas in North America and increased capital expenditures by mining customers.
Mr. Umpleby, who became CEO in January, has been working to shrink the company's manufacturing footprint, cut its head count and choose his team. In August, Caterpillar said its chief financial officer, Brad Halverson, will retire early next year.
Caterpillar also raised its estimate for restructuring costs for the year to $1.3 billion from $1.2 billion.
The company said meeting more of its financial and operational performance objectives raised short-term incentive-compensation expenses in the quarter by about $400 million, compared with no similar costs in the third quarter last year.
Caterpillar's full-time workforce decreased to 96,700 employees at the end of the third quarter, from 97,100 the prior year. The company's "flexible" workforce increased by 6,500 to 114,900.
Caterpillar, which had in years past released guidance for the following year during its third quarter, didn't provide that Tuesday, citing its new enterprise strategy.
The manufacturer also said it would raise prices early next year through a new structural change to its machine pricing: list prices will fall but the company will cut merchandising discounts even more, leading to higher prices.
The company saw revenue increases across its three main segments and in every geographic region.
In all for the third quarter, Caterpillar reported a profit of $1.06 billion, or $1.77 a share, compared with $283 million, or 48 cents a share, a year ago. Excluding restructuring costs, the company said it earned $1.95 a share, compared with 85 cents a year ago. Revenue increased 25% to $11.41 billion.
Analysts polled by Thomson Reuters had expected $1.27 in adjusted earnings per share on revenue of $10.65 billion.
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(END) Dow Jones Newswires
October 24, 2017 09:07 ET (13:07 GMT)