--- title: "Dow 30 Earnings: Caterpillar Inc. Third Quarter 2018" description: Dow 30, third-quarter earnings, Caterpillar, CAT, shares have fallen sharply in price, despite a better-than-expected performance in the third quarter. Sales surged 18% over the year-ago period, to $13.5 billion, and eclipsed our $13.0 billion call. image: https://investor.valueline.com/hubfs/VL%20Blog%20Images/iStock-91038480.png --- [![The Value Line Blog](https://investor.valueline.com/hubfs/VL%20Blog%20Images/vl_blog_header.png)](https://investor.valueline.com/blog) [Stock Highlights](https://investor.valueline.com/blog/topic/stock-highlights) # Dow 30 Earnings: Caterpillar Inc. Third Quarter 2018 October 23, 2018 Shares of heavy equipment manufacturer **Caterpillar** ([CAT ](https://research.valueline.com/research#sec=company&sym=CAT)– [Free Caterpillar Stock Report](https://research.valueline.com/api/report?documentID=2185-VL_20180817_VLIS_CAT_474_01-50S567O9LHNARTDGCM93O0JJK7&symbol=CAT)) have fallen sharply in price, despite a better-than-expected performance in the third quarter. Sales surged 18% over the year-ago period, to $13.5 billion, and eclipsed our $13.0 billion call. The top line was driven by higher volumes across all three segments. The Construction Industries unit capitalized on improved conditions, especially in North America, where demand for new equipment used in oil and gas activities firmed. The Resource Industries division benefited from elevated investments in both mining and heavy constructions arenas. Lastly, the Energy & Transportation business gained from increased demand across all applications, except industrial. The healthy top-line advance overcame a rise in manufacturing costs, which reflected higher freight and material expenses due to increased steel prices and tariffs. Freight costs were hurt by supply chain efficiencies, as the industry continues to respond to strong global demand. SG&A and research and development expenses remained high due to investments in various growth initiatives. Altogether, Caterpillar reported a 47% share-net gain over the year-ago period, to $2.86, which beat our $2.81 estimate. Moreover, this was the best third-quarter profit performance in the company's long history. Operating conditions appear to be sound for the economic bellwether. In fact, most end markets continue to gain strength. Order rates and backlog remain healthy. Furthermore, ongoing benefits from operational efficiency programs and enhanced cost discipline are expected to help. However, Wall Street is concerned that trade frictions, which have boosted the prices of various metals, will remain at the forefront. Amid strong global demand and U.S. tariffs, the price of steel has risen nearly 30% this year. In order to offset higher input costs, Caterpillar continues to rely on increased prices. We are not sure this is a sustainable policy since the company sells to certain industries that have probably reached their peaks. Geopolitical factors likely led Caterpillar to maintain the adjusted profit-per-share outlook of $11.00-$12.00. We are taking a cautious stance and keeping our 2018 top- and bottom-line estimates of $53.87 billion and $11.50, respectively, intact. The stock had been on a two-year run and even established a new all-time high earlier this year, but has since pulled back in price as investors have grown worried about a potentially prolonged trade war. **About The Company:** Caterpillar Incorporated is the world’s largest producer of earth-moving equipment. Major global markets include road building, mining, logging, agriculture, petroleum, and general construction. Products include tractors, scrapers, graders, compactors, loaders, off-highway truck engines, and pipelayers. Also makes diesel & turbine engines and lift trucks.   - Dominic Silva *At the time of this article’s writing, the author did not have positions in any of the companies mentioned.* [![Register now for our free One Stock to Buy webinar](https://no-cache.hubspot.com/cta/default/2532383/5a80130b-f0ce-4bd8-acbd-f077f2232ec5.png)](https://cta-redirect.hubspot.com/cta/redirect/2532383/5a80130b-f0ce-4bd8-acbd-f077f2232ec5) ### Popular Posts Search Search Blog ### Topics - [Investing 101 (2)](https://investor.valueline.com/blog/topic/investing-101) - [Market Commentary (37)](https://investor.valueline.com/blog/topic/market-commentary) - [Stock Highlights (390)](https://investor.valueline.com/blog/topic/stock-highlights) - [Stock Market Today (2071)](https://investor.valueline.com/blog/topic/stock-market-today) Copyright 2026 Value Line, Inc. All Rights Reserved. Factual material is obtained from sources believed to be reliable and is provided without warranties of any kind. VALUE LINE IS NOT RESPONSIBLE FOR ANY ERRORS OR OMISSIONS HEREIN OR ANY DAMAGES OR LOSSES ARISING FROM ANY USE OF THE INFORMATION CONTAINED HEREIN. This blog is strictly for subscriber's own, non-commercial, internal use. No part of it may be reproduced, stored or transmitted in any printed, electronic or other form, or used for generating or marketing any printed or electronic publication, service or product. Officers, directors, or employees of Value Line, Inc. and its affiliates and subsidiaries, and EULAV Asset Management, may own stocks that are featured in this email. Nothing herein should be construed as an offer to buy or sell securities or to give individual investment advice. Value Line, the Value Line logo, The Most Trusted Name in Investment Research, “Smart research. Smarter investing.”, The Value Line Investment Survey, Timeliness, and Safety are trademarks or registered trademarks of Value Line, Inc. and/or its affiliates in the United States and other countries.