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Released April 26, 2018 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--First-quarter 2018 results by heavy machinery manufacturer Caterpillar Incorporated (NYSE:CAT) (Peoria, Illinois) reflect a strong rebound in the mining, energy and power industries. Caterpillar, which is often seen as a bellwether for growth in those industries, reported $12.9 billion in first-quarter sales, a 31% increase from first-quarter 2017. The company's operating profit rose to $2.1 billion in the just-ended quarter, up from $400 million a year earlier.
Caterpillar describes itself as is the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives.
Chief Executive Officer Jim Umpleby said during the company's earnings conference call this week that its Construction Industries segment saw 38% growth in sales in the just-ended quarter. For the remainder of the year, continued strength will be seen in building construction, infrastructure and pipeline activity, according to the company. Demand for building construction and infrastructure equipment and machinery continues to be strong in China, Umpleby said.
Caterpillar's Resource Industries segment, which includes mining equipment and machinery, saw a 31% jump in sales due to a surge in demand across all regions. Stronger commodity prices are causing mining firms to invest more in fleet replacements and mine expansions, Umpleby said. The segment's operating profit more than doubled to $378 million.
Industrial Info is tracking $1.2 trillion in mining-related projects worldwide. One of the larger projects is Phase I of BHP Billiton plc's (NYSE:BHP) (Melbourne, Australia) grassroot underground potash mine and mill near Jansen in Saskatchewan, Canada, valued at $8 billion. Part of a three-phase, $14 billion project, the initial phase would produce four million tons per year of compacted granular potash after its planned completion in late 2023. For more information, see Industrial Info's project report.
Finally, sales by the Energy and Transportation segment grew 26%. Oil and gas-related sales were up $400 million, or nearly 50%, Umpleby said, and onshore activity in North America remained robust.
"While demand for new equipment for onshore and offshore drilling equipment remains weak, demand for transmission, pressure pumps and high pressure flow iron continues to support well servicing," Umpleby said. Caterpillar continues to see significant sales of power turbines for midstream gas compression to support the buildout of North America's natural gas infrastructure, he continued.
Industrial Info is tracking nearly $1.5 trillion in Oil & Gas Production project activity, including several liquefied natural gas (LNG) production plants and terminals. Among those is Sempra Energy's (NYSE:SRE) (San Diego, California) $10 billion Cameron natural gas liquefaction plant project in Hackberry, Louisiana. Construction on the 15 million-metric-ton-per-year plant kicked off in 2014, with completion expected in early 2019. Amec Foster Wheeler, now part of Wood Group plc (Aberdeen, Scotland), is the front end engineering design (FEED) contractor. For more information, see Industrial Info's project report.
Following a multi-year downturn, power generation-related sales were up 35%, with the greatest improvements seen in the European, Africa, and Middle East regions, Umpleby said. Industrial Info is tracking nearly $6.4 trillion in active power projects, including the $27.3 billion Hinkley Point C Nuclear Power Station in Bridgwater, England. When completed in late 2025, the plant will have a 3,260-megawatt capacity. For more information, see Industrial Info's project report and January 24, 2018, article - U.K. Hinkley Nuclear Project Back on Track for 2025.
Transportation sales were up 13%, in part reflecting higher rail traffic in North America. Industrial Info is tracking nearly $665 billion in transportation projects globally.
As a result of the better-than-expected earnings results, Caterpillar raised its earnings guidance by $2 per share, a 20% increase.
However, the Dow Jones Industrial Average plunged on Tuesday due in part to Caterpillar Chief Financial Officer Brad Halverson's remark that the first-quarter adjusted profit per share would likely be the high water mark for the company this year. The Dow Jones average closed more than 400 points lower on Tuesday.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
Caterpillar describes itself as is the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives.
Chief Executive Officer Jim Umpleby said during the company's earnings conference call this week that its Construction Industries segment saw 38% growth in sales in the just-ended quarter. For the remainder of the year, continued strength will be seen in building construction, infrastructure and pipeline activity, according to the company. Demand for building construction and infrastructure equipment and machinery continues to be strong in China, Umpleby said.
Caterpillar's Resource Industries segment, which includes mining equipment and machinery, saw a 31% jump in sales due to a surge in demand across all regions. Stronger commodity prices are causing mining firms to invest more in fleet replacements and mine expansions, Umpleby said. The segment's operating profit more than doubled to $378 million.
Industrial Info is tracking $1.2 trillion in mining-related projects worldwide. One of the larger projects is Phase I of BHP Billiton plc's (NYSE:BHP) (Melbourne, Australia) grassroot underground potash mine and mill near Jansen in Saskatchewan, Canada, valued at $8 billion. Part of a three-phase, $14 billion project, the initial phase would produce four million tons per year of compacted granular potash after its planned completion in late 2023. For more information, see Industrial Info's project report.
Finally, sales by the Energy and Transportation segment grew 26%. Oil and gas-related sales were up $400 million, or nearly 50%, Umpleby said, and onshore activity in North America remained robust.
"While demand for new equipment for onshore and offshore drilling equipment remains weak, demand for transmission, pressure pumps and high pressure flow iron continues to support well servicing," Umpleby said. Caterpillar continues to see significant sales of power turbines for midstream gas compression to support the buildout of North America's natural gas infrastructure, he continued.
Industrial Info is tracking nearly $1.5 trillion in Oil & Gas Production project activity, including several liquefied natural gas (LNG) production plants and terminals. Among those is Sempra Energy's (NYSE:SRE) (San Diego, California) $10 billion Cameron natural gas liquefaction plant project in Hackberry, Louisiana. Construction on the 15 million-metric-ton-per-year plant kicked off in 2014, with completion expected in early 2019. Amec Foster Wheeler, now part of Wood Group plc (Aberdeen, Scotland), is the front end engineering design (FEED) contractor. For more information, see Industrial Info's project report.
Following a multi-year downturn, power generation-related sales were up 35%, with the greatest improvements seen in the European, Africa, and Middle East regions, Umpleby said. Industrial Info is tracking nearly $6.4 trillion in active power projects, including the $27.3 billion Hinkley Point C Nuclear Power Station in Bridgwater, England. When completed in late 2025, the plant will have a 3,260-megawatt capacity. For more information, see Industrial Info's project report and January 24, 2018, article - U.K. Hinkley Nuclear Project Back on Track for 2025.
Transportation sales were up 13%, in part reflecting higher rail traffic in North America. Industrial Info is tracking nearly $665 billion in transportation projects globally.
As a result of the better-than-expected earnings results, Caterpillar raised its earnings guidance by $2 per share, a 20% increase.
However, the Dow Jones Industrial Average plunged on Tuesday due in part to Caterpillar Chief Financial Officer Brad Halverson's remark that the first-quarter adjusted profit per share would likely be the high water mark for the company this year. The Dow Jones average closed more than 400 points lower on Tuesday.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
