Better yet, Caterpillar foresees further improvements ahead, leading it to upgrade its full year outlook. It now expects profit per share to be about $2.10 at the midpoint of the sales and revenues outlook range or about $3.75 a share excluding restructuring costs. The previous outlook for profit per share was $2.30 at the midpoint of the sales and revenues outlook, or about $2.90 per share excluding restructuring costs.

In the first quarter of 2017 Caterpillar had sales and revenue of US$9.8 (A$13) billion, up from the $9.5 billion it posted in the first quarter of 2016.

Operating profit for the first quarter was $417 million, down from the $494 million of the year before. However, a significant increase in restructuring costs of $77 million hit that result. Without the restructuring costs operating profit improved by $514 million, compared with the first quarter of 2016.

Lower period costs, improved variable manufacturing costs and favourable price realisation also contributed to the increase in operating profit.

About half the variable manufacturing cost improvement was from lower material costs.

Period costs were lower primarily due to substantial restructuring and cost reduction actions over the past year.

The reductions impacted period manufacturing costs, selling, general and administrative expenses and research and development expenses. The most significant reduction was in R&D, which could pose problems for the company going forward.

The cost reductions were offset by higher short-term incentive compensation expenses.

Restructuring costs of $752 million in the first quarter of 2017 were primarily related to the announced closure of the facility in Gosselies, Belgium. That closure will impact about 2000 employees. In the first quarter of 2016, restructuring costs were $161 million.

Over the past year Caterpillar has cut about 6400 workers, leaving it with 95,300 full-time employees at the end of the first quarter 2017.

In Caterpillar’s resources business sales were $1.7 billion for the 2017 first quarter, up 15% on the same time last year.

Higher sales volumes, particularly in aftermarket parts, drove the improvement. Indeed, aftermarket parts sales have increased sequentially in each of the past four quarters. Increases in certain commodity prices over the past year have led to increased mining production, driving the need for maintenance and rebuild activities.

While several major miners say they have to start buying equipment that has not really translated to higher equipment sales for Caterpillar as yet. The bulk of its sales improvement came from dealers increasing their inventories to get ready for the spring buying season.

The Resources Industries division’s profit was $158 million in the first quarter, a marked turnaround from the $96 million loss it posted the same time last year.

The good news for Caterpillar is that it is seeing signs of recovery in several of the industries it services.

Caterpillar CEO Jim Umpleby said the company had benefited from its significant cost reduction and restructuring actions, which had strengthened the balance sheet and improved cash flow.

“With this momentum we will continue to focus investment on improving our competitive position by investing in new technologies and improving our productivity to deliver profit growth and shareholder value,” he said.