Caterpillar Inc. profit and sales beat estimates for the first quarter, driven by a boost in its mining business, helping ease investor concerns that trade tensions and signs of slowing global growth would be a drag on the heavy-equipment maker.
The Deerfield-based mining- and construction-machines 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.
Revenue rose to $13.5 billion from $12.9 billion in the first quarter of 2018. The increase was primarily due to higher sales volume driven by improved demand for both equipment and services, with the most significant increase in resource industries, the company said in a statement Wednesday.
Analysts including Courtney Yakavonis at Morgan Stanley say the need to replace aging mining-equipment means orders are likely to kick into high gear.
Dealer machine and engine inventories increased about $1.3 billion in the quarter, compared with an increase of about $1.2 billion a year earlier.