Old companies have led the Dow Jones Industrial Average higher in 2016. Caterpillar Inc. (NYSE: CAT) is up 14.4% to $77.72. Exxon Mobil Corp. (NYSE: XOM) is up 13.4% to $88.40. Chevron Corp. (NYSE: CVX) is up 13.6% to $102.28. The explanation for the rise of the big oil companies is obvious. Caterpillar’s advance has to do with job cuts as much as anything else.

Earnings at Caterpillar dropped to $0.46 per share from $2.03 last year. However, Wall Street likes the number of jobs Caterpillar cut, down to 104,400 from 113,300.

As is true with most CEOs, even poor numbers did not adversely affect a sharp drop in revenue:

Total sales and revenues were $9.461 billion in the first quarter of 2016, compared with $12.702 billion in the first quarter of 2015, a decline of $3.241 billion, or 26 percent. The decrease was primarily due to lower sales volume. While sales for both new equipment and aftermarket parts declined in all segments, most of the decrease was for new equipment. The unfavorable impact of price realization and currency also contributed to the decline.

Caterpillar Chairman and Chief Executive Officer Doug Oberhelman said:

While first-quarter results were about as we expected, sales and profit were well below the first quarter of 2015.  Sales declined across the company with substantial reductions in construction, oil and gas, mining and rail.  While many of the industries we serve are challenged, we remain focused on what we can control: the quality of our products, our market position, safety in our facilities and continued restructuring and cost reduction.  In fact, our period costs and variable manufacturing costs in the quarter were nearly $500 million lower than the first quarter of 2015.

The quality control angle must have been good enough.

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