Caterpillar Beats Earnings Estimates as Global Recovery Boosts Sales
LAHORE MIRROR (Monitoring Desk)– Caterpillar Inc (CAT.N) reported quarterly earnings that exceeded analyst estimates on Thursday, as demand for its machines was propelled by the fastest global economic growth since the 1970s.
The Illinois-based manufacturer of heavy machinery, a bellwether for economic activity, said stronger retail demand led dealers to boost inventories more in the latest quarter than a year ago, driving sales across all its three primary segments.
Adjusted profit was $2.87 per share, up from $1.65 per share a year earlier. Analysts surveyed by Refinitiv, on average, expected earnings of $1.94 per share.
The company’s shares were up about 3% at $239.25 in premarket trading. The stock has surged 27% since its last earnings report, outperforming the broader blue chip Dow Jones Industrial Average (.DJI).
Equipment sales rose 13% year-on-year to $11.2 billion, led by a 72% surge in construction machine sales in Asia.
“We’re encouraged by improving conditions in our end markets and are proactively managing supply chain risks,” said Caterpillar Chief Executive Jim Umpleby.
The International Monetary Fund said earlier this month that unprecedented public spending to fight the COVID-19 pandemic, primarily by the United States, would push global growth to 6% this year, the fastest pace since 1976, after the steepest annual downturn of the post-war era last year.
Investors are also betting rising commodity prices and the U.S. administration’s proposed infrastructure stimulus will lift demand for Caterpillar’s yellow bulldozers, mining trucks and other equipment.