Caterpillar earnings beat on price increases and equipment demand


The Caterpillar logo is pictured at the Bauma trade fair for construction machinery, building material machinery, mining machinery, construction vehicles and construction equipment in Munich, Germany, April 8, 2019. REUTERS/Michaela Rehle/File Photo

Sign up now for FREE unlimited access to

to register

April 28 (Reuters) – Caterpillar Inc (CAT.N) on Thursday reported better-than-expected quarterly earnings and earnings, fueled by price increases, while a rise in oil and commodity prices led to more orders for its equipment used to facilitate production is used and transportation.

However, the company’s shares were down 2% during the pre-bell trading session as it indicated that rising costs had weighed on profit margins in the current quarter.

Caterpillar, an indicator of global economic activity, has benefited from a stunning rise in commodity and oil prices as a pick-up in drilling and excavation activity prompts the mining and oil industries to spend more on their equipment.

Sign up now for FREE unlimited access to

to register

“Mining activity will continue to increase,” said Andrew Bonfield, Caterpillar’s chief financial officer, in an interview.

Higher construction activity also boosted Caterpillar’s first-quarter results as the company reported double-digit sales growth in all three segments.

However, device sales in Asia-Pacific fell as strict lockdowns in China, which typically accounts for 5% to 10% of company sales, impacted business in the country.

Total operating expenses increased 16.5% to $11.73 billion in the quarter ended March.

The company managed to dodge the impact of supply chain challenges and higher input costs, exacerbated by the ongoing war in Ukraine, by announcing two price increases last year.

Caterpillar also said it continues to anticipate further price increases, which will help improve its margins in the second half of the year compared to the first.

Adjusted earnings for the quarter were $2.88 per share, beating the average analyst expectation of $2.60 per share.

Revenue for the quarter rose about 14% to $13.59 billion, beating expectations of about $13.4 billion.

Sign up now for FREE unlimited access to

to register

Reporting by Aishwarya Nair and Abhijith Ganapavaram in Bengaluru; Edited by Anil D’Silva

Our standards: The Thomson Reuters Trust Principles.


Comments are closed.