Caterpillar Inc. (CAT - Get Report) posted stronger-than-expected second-quarter earnings, and boosted its full-year guidance, as the heavy equipment maker looks to have surpassed its own "high water mark" for future profits even amid rising input costs and the threat of tariffs on exports into some of its key markets.
Deerfield, Ill.-based Caterpillar said adjusted earnings for the three months ending in June came in at $2.97 per share, well ahead of the Street consensus of $2.73 and up more than 83% from the same period last year. Sales totaled $14 billion, the company said, topping analysts' estimates of $13.99 billion.
The Dow component also said it expects to see full-year earnings of between $10.50 and $11.50 per share, up from a prior forecast of $9.75 to $10.75. The improved outlook followed comments from the company in April that suggested its stellar first quarter represented a "high water mark" for the year.
"Caterpillar delivered record second-quarter profit per share," said CEO Jim Umpleby. "Our team is doing a great job executing our strategy for profitable growth, focusing on operational excellence, expanded offerings and services."
"Based on outstanding results in the first half of the year and continued strength in many of our end markets, Caterpillar is again raising our profit outlook for 2018," he added. "We remain focused on operational excellence, cost discipline and investing for long-term profitable growth."
Caterpillar shares rose 0.2% to $142.87 at 10:00 a.m. New York time. The stock had gained by as much as 2.6% in pre-market trading.
Caterpillar said it raised guidance because of "the continued strength in many end markets," but noted that "recently imposed tariffs are expected to impact material costs in the second half of the year by approximately $100 million to $200 million, and the company expects supply chain challenges to continue to pressure freight costs."
The company, however, seeks to "mitigate these impacts through announced mid-year price increases, as well as structural cost discipline," said Credit Suisse analyst Jamie Cook.
Caterpillar said its order backlog at the end of the second quarter was $17.7 billion, a figure it said was "about flat with the first quarter of 2018," but about $2.9 billion higher compared to the same period last year as decreases in construction orders were offset by gains in energy and transportation.
"Bottom line: CAT says everything is fine," Said Jefferies analyst Stephen Volkmann.
-- This story has been updated to include analyst commentary.
-- Anders Keitz contributed reporting to this story.