Caterpillar on Monday became the latest U.S. company warning about tariff impact, even as the heavy equipment giant reported second-quarter earnings that beat Wall Street forecasts.
Referring to the steel tariffs recently imposed by the Trump administration, Caterpillar said the duties imposed on imports of metals would raise the company's material costs by approximately $100 million to $200 million during the second half of the year.
However, the Deerfield, Illinois-based company predicted it would largely offset the tariff impact, as well asÃÂ supply chain challenges, through previously-announced midyear price increases.
ÃÂ Caterpillar isÃÂ the world's largest manufacturer ofÃÂ construction and mining equipment, diesel and natural gas engines, industrial gas turbines,ÃÂ and diesel-electric locomotives. The company said higher steel prices and increased freight costs droveÃÂ its manufacturing costs higher during the April-June quarter.
President Donald Trump has repeatedly hailed his strategy of combating U.S. trade imbalances by imposing tariffs in response to similar duties that China, members of the European Union, and other countries have placed on U.S. imports.
However, the strategy has triggered concern from some U.S. manufacturersÃÂ and warnings about higher prices for consumers. Last week, General Motors reported $300 million in higher commodity costs,ÃÂ while Ford said the tariff-related financial impact could total $600 million for the full year.
On Saturday,ÃÂ theÃÂ influential political network associated with conservative billionaire Charles Koch criticized TrumpÃ¢ÂÂs trade tariffs, characterizing them as "protectionism"ÃÂ that hurts American businesses and consumers.
DespiteÃÂ Caterpillar's tariff warning, the company raised its profit per share outlook to a range of $10.50 to $11.50, up from the previousÃÂ range of $9.75 to $10.75.
Excluding roughly $400 million in restructuring costs, Caterpillar also forecast adjustedÃÂ profit per share of $11 to $12, up from $10.25 to $11.25.
"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," CEO Jim Umpleby said in a statement issued with the earnings results.
Caterpillar (CAT) shares were down 0.5 percent at $141.85 in morning trading.
In overall second-quarter results, the company reported $2.82 in earnings per share based on profits of nearly $1.71 billion, up from $1.35 and $802 million for the same period last year. The results topped the consensus forecasts of financial analysts surveyed by Bloomberg.
Follow USA TODAY reporter Kevin McCoy on Twitter: @kmccoynyc