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REUTERS - Caterpillar Inc reported a quarterly profit that crushed Wall Street estimates and the company raised its sales forecast, underpinned by a recovery in the industries it caters to, sending its shares to their highest in more than three years.
The strong outlook points to a rebound in Caterpillar's business, which has been battered for years by a decline in oil and commodity prices as well as weakness in China and other emerging markets.
"There are encouraging signs, with promising quoting activity in many of the markets we serve," Chief Executive Jim Umpleby said in a statement.
The company's shares were up 6.7 percent at $103.29 in early trading on Tuesday.
To cope with the downturn, the company has the cut costs, shuttered factories and reduced its workforce. Last year itself, Caterpillar cut more than 12,000 jobs.
Caterpillar on Tuesday increased its forecast for restructuring costs this year by $750 million to $1.25 billion.
The company's sales were up 11 percent in Asia Pacific, its third biggest market, in the first quarter, partly due to a rise in construction equipment sales in China as a result of increased investment in infrastructure.
However, sales in North America and Europe, Africa, Middle East, its two biggest markets, were largely flat.
The company said it now expects 2017 adjusted earnings of $3.75 per share, up from the $2.90 it had previously forecast.
It forecast sales and revenue of $38 billion-$41 billion, up from its previous forecast of $36 billion-$39 billion.
Analysts on average were expecting 2017 earnings of $3.26 per share, on revenue $38.27 billion, according to Thomson Reuters I/B/E/S.
Total sales and revenue rose 3.8 percent $9.82 billion in the first quarter ended March 31.
The increase was mainly due to higher sales volume, with the most significant increase in the resource industries business, the company said.
The unit makes giant rope shovels and draglines as well as mining trucks used by the mining industry.
Profit attributable to common stockholders fell to $192 million, or 32 cents per share in the quarter, from $271 million, or 46 cents per share, a year earlier.
Excluding restructuring costs, Caterpillar earned $1.28 per share, compared with 64 cents per share a year earlier.
Analysts on average had expected first-quarter earnings of 62 cents per share on revenue $9.27 billion.
Reporting by Ankit Ajmera in Bengaluru; Editing by Sriraj Kalluvila and Saumyadeb Chakrabarty