(Reuters) – Caterpillar Inc trounced forecasts for profit for the seventh straight quarter on Thursday as buoyant global demand and the recovery of commodities markets drove a 35 percent surge in sales of its construction and mining equipment.
Shares in the world’s largest heavy duty equipment maker were up another 2.7 percent in premarket trading and have now risen around 80 percent in the past year and 160 percent in the past two.
The company said it expected an adjusted profit of $8.25-$9.25 per share for 2018, compared with analysts’ average estimate of $8.19, according to Thomson Reuters I/B/E/S.
A year ago, Caterpillar was seeking to temper expectations for 2017, forecasting results well below analysts’ forecasts. In the event it has steadily raised its estimates for both construction and mining sales over the course of the last year as earnings again soared past expectations.
While the bulk of the earnings recovery in 2017 was driven by the company’s construction division, a strengthening global economy along with a rebound in commodities prices have boosted the outlook for its other two divisions – resource industries and energy & transportation.
Oil prices have shot up to above $70 a barrel from below $30 two years ago, encouraging new investments in the sector, and boosting demand for Caterpillar’s oil and gas mining equipment.
Mining activity has also picked up amid rising gold, iron ore and copper prices, leading to higher demand from customers.
Like many U.S. companies this quarter, Caterpillar also said it had taken a $2.4 billion charge related to recent U.S. tax changes, widening its net loss before adjustments to $1.30 billion, or $2.18 per share, from $1.17 billion, or $2.00 per share, a year earlier.
In adjusted terms, it made $2.16 per share compared to $0.83 per share a year ago.
(Reporting by Rachit Vats in Bengaluru and Rajesh Kumar Singh in Chicago; editing by Patrick Graham)