Shares of Caterpillar Inc. rose into record territory Tuesday, after the construction- and mining-equipment maker beat Wall Street’s forecasts for second-quarter profit and revenue by wide margins, with each business segment showing double-digit percentage growth.
“Our results continue to reflect healthy demand across most end markets for our products and services,” said Chief Executive Jim Umpleby on the post-earnings conference call with analysts, according to an AlphaSense transcript.
The stock
CAT,
+8.43%
shot up 7.1% in morning trading, enough to pace the Dow Jones Industrial Average’s gainers
DJIA,
+0.21%,
after closing Monday at a record $265.17.
The stock’s price gain of $18.86 was adding about 124 points to the Dow’s price, while the Dow slipped 14 points, or 0.1%, with 23 of 30 components losing ground.
Caterpillar reported before the opening bell net income that rose to $2.92 billion, or $5.67 a share, from $1.67 billion, or $3.13 a share, in the same period a year ago.
Excluding nonrecurring items, such as an $88 million “discrete tax benefit,” adjusted earnings per share rose to a record $5.55 from $3.18 last year, and was well above the FactSet consensus of $4.57.
Total revenue grew by $3.07 billion, or 21.6%, to $17.32 billion, which was 5.2% above the FactSet consensus of $16.46 billion. That beat percentage was the highest since first-quarter 2021 revenue beat expectations by 8.6%.
Within Caterpillar’s business segments, energy and transportation revenue jumped 27% to $7.22 billion, which topped the FactSet consensus of $6.15 billion; construction industries revenue rose 19% to $7.15 billion, exceeding expectations of $6.71 billion; and resource industries revenue increased 20% to $3.56 billion, just above Wall Street projections of $3.52 billion.
Sales volume contributed about $1.77 billion to the growth in total revenue and price realization contributed $1.42 billion, while unfavorable changes in currency rates acted as a $187 million drag.
Operating profit margin improved to 21.1% from 13.6%.
“Price realization should remain positive though the magnitude of the favorability versus the prior year is expected to be lower in the second half as we lap the more favorable pricing trends from last year,” said Chief Financial Officer Andrew Bonfield on the call. “Therefore, the increases in margins that have occurred from price outpacing manufacturing cost inflation should moderate in the second half of this year.”
TC Cowen analyst Matt Elkott said Caterpillar’s results reflected an “all-around beat,” as they were “strong on just about every level.” He reiterated his outperform rating on the stock.
Caterpillar’s stock has run up 30.7% over the past three months while the Dow as tacked on 4.4%.
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