Caterpillar Inc. (NYSE: CAT) reported second-quarter 2018 results before markets opened Monday. The heavy equipment firm posted adjusted diluted earnings per share (EPS) of $2.97 on revenues of $14.00 billion. In the same period a year ago, the company reported adjusted EPS of $1.49 on revenues of $11.33 billion. Second-quarter results also compare to consensus estimates for EPS of $2.73 and $13.88 billion in revenues.

The second consecutive quarterly jump in revenues was attributed to improvements in most end-user markets, healthy order rates, and a strong backlog. North American sales rose 18% year over year and Asia/Pacific sales rose 43%, while Europe/Africa/Middle East sales were up 28% and Latin American sales rose 8%. All these totals were smaller than year-over-year growth in the first quarter.

Operating profit rose from $1.18 billion a year ago to $2.17 billion as a result of higher sales volume. The company said favorable price realizations were partially offset by higher manufacturing costs.

The company expects a negative effect of some $100 million to $200 million in the second half of the year as a result of the Trump tariffs. The company expects to offset these effects with price increases and better execution.

CEO Jim Umpleby said:

Caterpillar delivered record second-quarter profit per share. 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. We remain focused on operational excellence, cost discipline and investing for long-term profitable growth.

For the second consecutive quarter, the company has raised its adjusted EPS outlook, this time from a prior range of $9.75 to $10.75 per share to a new range of $10.50 to $11.50

For the 2018 fiscal year, Caterpillar raised its adjusted EPS outlook from a prior range of $10.25 to $11.25 per share to a new range of $11.00 to $12.00. Full-year adjusted EPS includes an estimated $0.50 per share in restructuring costs. Analysts estimate third-quarter EPS of $2.62 and revenue of $12.8 billion. For the full year, consensus estimates call for EPS of $10.87 on sales of $53.65 billion.

Caterpillar noted that oil and gas and mining were showing particularly strong demand and the company was taking orders for delivery well into next year.

At the end of the second quarter, the order backlog totaled about $17.7 billion, about flat with the backlog at the end of the first quarter. This represents a sequential increase of about $1.7 billion.

The company’s forecast does not include any potential impacts from future geopolitical risk or trade restrictions. Passing along cost increases to customers is perhaps the most telling signal of how Caterpillar’s earnings will be received by the market.

Caterpillar’s shares were up 3.7% in premarket trading to $147.78, in a 52-week range of $112.09 to $173.24. The 12-month consensus analyst price target was $169.96 ahead of this morning’s report.

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