Caterpillar Inc. profit and sales beat estimates for the first quarter, driven by a boost in its mining business that may help ease investor concerns that trade tensions and signs of slowing global growth would be a drag on the heavy-equipment maker.
The mining and construction-equipment maker also boosted its per-share profit forecast for the year, crediting U.S. tax reforms.
The results from Caterpillar, an economic bellwether, add to signs that industrial earnings are holding up in the face of the U.S.-China trade war and worries that some end users may be reaching the peaks in their growth cycles. The company is benefiting from rising capital investment in mining. That’s helping offset the impact of slowing economies that could cut into its construction and transportation businesses.
Analysts including Courtney Yakavonis at Morgan Stanley say the need to replace aging mining equipment means orders are likely to kick into high gear. The stock rebounded in the first quarter after posting its worst annual loss in three years.
(By Joe Deaux)