Caterpillar, a proxy for global economic activity, has benefited from a staggering rise in prices of raw materials and oil
Caterpillar Inc on Thursday reported better-than-expected quarterly profit and revenue, powered by price hikes, while a surge in oil and commodity prices led to more orders for its equipment used in facilitating production and transport.
Shares of the company, however, slipped 2% in trading before the bell as it indicated pressure on its profit margins in the current quarter from surging costs.
“Mining activity will continue to increase,” Caterpillar Chief Financial Officer Andrew Bonfield said in an interview.
Higher construction activity also powered Caterpillar’s first-quarter results, as it reported double-digit sales growth across all three of its segments.
Asia/Pacific equipment sales, however, fell as strict lockdowns in China, which usually accounts for 5% to 10% of company sales, hit its business in the country.
Total operating costs in the quarter through March rose 16.5% to $11.73 billion.
Revenue for the quarter rose about 14% to $13.59 billion, beating expectations of about $13.4 billion.
Aishwarya Nair and Abhijith Ganapavaram, Reuters News, April 28, 2022
