Mubasher: Caterpillar on Tuesday reported that its profit rose year-on-year to in the third quarter of 2018, as price hikes and rising sales offset higher costs to manufacture and ship its machinery as a result of higher metal tariffs.

The heavy equipment manufacturer’s profit rose to $1.727 billion in Q3-18, compared with $1.059 billion in Q3-17. Diluted earnings per share (EPS) jumped to $2.88 from $1.77 over the three-month period ended September.

The US company generated $13.51 billion in total sales and revenues over the period between July and September, versus $11.41 billion during the same period last year.

“This was the best third-quarter profit per share in our company’s history,” Caterpillar’s CEO Jim Umpleby commented on the results.

However, the company said it would raise prices 1% to 4% worldwide next year on most machines and engines in a bid to offset some of the higher costs.

“Manufacturing costs were higher due to increased material and freight costs [and] material costs were higher primarily due to increases in steel prices and tariffs,” the company said, noting that the impact of tariffs for material costs in the third quarter was around $40 million.

“For the full year of 2018, we expect the impact of recently imposed tariffs will be at the low end of the previously provided range of $100 million to $200 million,” the company said.

Caterpillar confirmed its prior full-year guidance for adjusted earnings to a range of $11 to $12 per share, while it was widely expected to raise that forecast.

This excludes restructuring costs of roughly $400 million and the net tax benefit.