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Caterpillar’s Revenues: Highest Growth in More than Six Years

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Caterpillar second-quarter revenues

Caterpillar (CAT) reported revenues of $14.01 billion in the second quarter—an increase of 23.7% on a YoY (year-over-year) basis. In the second quarter of 2017, Caterpillar reported revenues of $11.33 billion. Caterpillar’s revenues managed to beat analysts’ estimate of $13.88 billion. The company’s second-quarter revenues represent the highest growth percentage in more than six years.

Caterpillar’s revenue growth was mainly driven by higher volume growth in all of the three major reporting segments. The revenue growth was also due to favorable foreign currency specifically from the stronger euro and yuan. Geographically, Caterpillar’s revenues grew across all of the regions.

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Outlook

Caterpillar expects the demand conditions to continue in most of its end markets. The backlogs during the quarter remained stable sequentially at $17.7 billion. The backlogs grew by $2.9 billion on a YoY basis. The backlog is expected to increase due to projected growth in oil and gas and mining.

Jim Umpleby, Caterpillar’s CEO, said, “Caterpillar delivered record second-quarter profit per share. Our team is doing a great job executing our strategy for profitable growth, focusing on operational excellence, expanded offerings and services.”

Investors can hold Caterpillar indirectly by investing in the Industrial Select Sector SPDR Fund (XLI), which has invested 3.6% of its portfolio in Caterpillar. The fund also provides exposure to Boeing (BA), 3M (MMM), and Honeywell (HON) with weights of 8.25%, 5.3%, and 5.0%, respectively, as of July 31.

Next, we’ll discuss how Caterpillar’s segments performed in the second quarter.

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