PEORIA, Ill. (AP) — Caterpillar's belt tightening paid off in the third quarter as the manufacturer easily beat Wall Street expectations and raised its outlook for the year.
Shares rose nearly 4 percent before the opening bell Thursday.
The company has wrestled with a slowing global economy and took a restructuring charge of 9 cents per share during the quarter tied to cost cuts.
However, CEO and Chairman Doug Oberhelman said that he is hopeful that economic growth will pick up next year.
Caterpillar, based in Peoria, Illinois, reported third-quarter net income of $1.02 billion, or $1.63 per share, in the three months ending Sept. 30, compared with $951 million, or $1.45 per share, in the same quarter a year ago.
Adjusted to remove restructuring costs, earnings came to $1.72 per share, blowing past Wall Street expectations of $1.33 per share.
Revenue rose slightly to $13.55 billion, also topping the $13.37 billion analysts expected, according to Zacks Investment Research.
Even as new evidence of a global economic slowdown emerged, Caterpillar said Thursday that it expects adjusted full-year earnings to reach $6.50 per share, up from its previous forecast of $6.20 per share. Revenue is expected to be $55 billion, in the middle of earlier projections between $54 billion and $56 billion.
This week, China reported economic growth fell to a five-year low of 7.3 percent in the third quarter and there are concerns that Europe is sliding back into recession.
"We've continued to focus on what we can control — cost management and operational execution," Oberhelman said.
Shares of Caterpillar Inc. hit $98.01 in trading before the market opened Thursday. As of Wednesday's close, its shares have risen 4 percent since the beginning of the year