Increased demand for construction equipment in North America helped push Caterpillar's revenue 5 percent higher and the company beat forecasts.
Sales of new construction equipment in North America jumped 13 percent in the first quarter, primarily driven by road construction projects, Caterpillar said Wednesday.
Construction sales declines in Latin America, Asia, Europe, Africa and the Middle East may have investors concerned as shares fell in morning trading.
Caterpillar, based in Deerfield, Illinois, reported first quarter net income grew 13 percent to $1.88 billion, or $3.25 per share, from the 2018 quarter. A benefit related to U.S. tax reform was worth $178 million, or 31 cents per share. Earnings, adjusted for non-recurring gains, came to $2.94 per share.
The results beat Wall Street expectations. The average estimate of 10 analysts surveyed by Zacks Investment Research was for earnings of $2.84 per share.
The construction equipment company said total revenue grew to $13.47 billion from $12.86 billion and also beat Street forecasts. Analysts expected $13.4 billion. Caterpillar said the revenue boost was partially offset by unfavorable currency impacts due to the stronger dollar.
Citing the tax benefit, the company increased its full-year outlook to between $12.06 and $13.06 per share from a range of $11.75 to $12.75 per share. Analysts surveyed by FactSet forecast $12.16 per share in annual profit.
"The company continues to have confidence in the fundamentals of its diverse end markets, and expectations for 2019 performance are unchanged," Caterpillar said in a statement.
In morning trading, Caterpillar shares were down 2.8 percent to $138.03.
Main image: In this July 25, 2017, file photo Caterpillar machinery sits at a dealership in Murrysville, Pa. Caterpillar Inc. reports earnings Wednesday, April 24, 2019. (AP Photo/Gene J. Puskar, File)