Caterpillar reported record second-quarter earnings per share Monday and bumped up its full-year forecast. The big machinery exporter also said it would offset a sizable second-half profit hit from the tariffs by raising prices.

"Caterpillar delivered record second-quarter profit per share," CEO Jim Umpleby said in a statement. "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."

Earnings per share were $2.82, the best second-quarter EPS performance for the Illinois-based heavy equipment manufacturer. It was more than double that from a year earlier, while it's adjusted earnings of $2.97 per share was nearly twice as high as the year-earlier period.

Caterpillar raised its full-year profit forecast to a range of $11 per share to $12 per share, an increase of 75 cents per share from its previous guidance. The company gave this higher forecast despite rising costs due to tariffs, with Caterpillar saying it expects an impact of $100 million to $200 million on its material costs in the second half of this year. Caterpillar said it will offset those impacts with price increases this year.

"Our business in China continues to be strong. We haven't seen an impact of the trade tension on our business," Umpleby said on a conference call with investors.

Shares of Caterpillar closed down nearly 2 percent Monday at $139.75 per share, sliding nearly 10 percent this year. The stock had risen after the company's report, before turning lower as the majority of industrial stocks slipped in trading.