Caterpillar Inc. (NYSE:CAT) Q3 2017 Earnings Conference Call Transcript
Oct 24, 2017 • 11:00 am ET
Good morning, ladies and gentlemen, and welcome to the Caterpillar 3Q 2017 Results Conference Call. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation.
It is now my pleasure to turn the floor over to your host, Amy Campbell, Director of IR. Ma'am, the floor is yours.
Thank you, Kate. Good morning, and welcome, everyone, to our third quarter earnings call. I'm Amy Campbell, Caterpillar's Director of IR. And on the call today, I'm pleased to have our CEO, Jim Umpleby; our Group President and CFO, Brad Halverson; and our VP of Financial Services, Joe Creed.
Remember, this call is copyrighted by Caterpillar and any use, recording or transmission of any portion of the call without the expressed written consent of Caterpillar is strictly prohibited. If you'd like a copy of today's call transcript, we'll be posting it to the Investors section of our caterpillar.com website. It will be in the section labeled Results Webcast.
(Forward-Looking Cautionary Statements)
In addition, there's a reconciliation of non-GAAP measures that can also be found in this morning's release and is posted at caterpillar.com/earnings. We're going to start the call this morning with a few words from Jim, and then Brad will walk us through third quarter results and our revised outlook, and then we will begin the Q&A portion of the call. Jim?
Thank you, Amy. I'd like to start by thanking and congratulating our team for excellent results this quarter. Sales and revenues were up 25% from the third quarter of 2016, and adjusted profit per share is well over double what it was one year ago. Overall, we're seeing broad-based sales increases across a number of industries in all regions. We continue to see strength in China construction. Onshore oil and gas in North America is also strong.
Construction activity in North America was up compared to last year, and we're seeing increased order activity by mining customers. Our profit margins continued to improve in our three primary segments. The improved margins are driven by higher sales volume, price realization primarily in construction Industries, and our team's focus on cost discipline. Material costs were a slight headwind in the third quarter, and we expect this trend to continue.
With this more widespread increase in sales, we have raised our full-year top line outlook. We now expect full-year 2017 sales and revenues of about $44 billion. And as a result of our team's strong performance, we are raising our 2017 adjusted profit per share outlook to about $6.25. We know product availability is a concern in some areas. We continue to work with our supply chain to increase production levels to satisfy customer demand for those markets that are improving. I'm also pleased with our progress in executing our new strategy for profitable growth based on operational excellence, expanded offerings and services. We presented the strategy in September, but I'm going to take a minute to