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Caterpillar Stock Jumps As Construction Sales Power Q3 Earnings Beat

A 30% gain in construction sales helped equipment-maker Caterpillar post stronger-than-expected third quarter earnings Thursday.

Caterpillar  (CAT) - Get Caterpillar Inc. Report posted stronger-than-expected third-quarter earnings Thursday as a rebound in construction equipment demand, as well as surging commodity prices, helped boost the industrial group's bottom line.

Caterpillar said adjusted profits for the three months ending in September were pegged at $2.66 per share, up nearly 100% from the same period last year and well ahead of the Street consensus forecast of $2.20 per share. Group revenues, Caterpillar said, rose 25% to $12.4 billion, a figure that just missed analysts' estimates of a $12.5 billion tally.

Operating profit margin was 13.4% for the quarter, down from 13.7% in the previous three month period. Caterpillar also noted it ended the quarter with $19.4 billion in cash, compared to $10.8 billon after the three months ending in June.

 "Our global team continues to execute our long-term strategy for profitable growth while working to mitigate supply chain challenges as we serve our customers," said CEO Jim Umpleby. "Our third-quarter results reflect higher sales and revenues across our three primary segments and in all regions.

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Caterpillar shares were marked 2.7% higher in early trading following the earnings release to change hands at $201.20 each.

Construction sales were up 30% to $5.255 billion, Caterpillar said, "higher end-user demand and the impact from changes in dealer inventories. Overall, dealers decreased inventories more during the third quarter of 2020 than during the third quarter of 2021."

Resource, energy and transportation sales were up 32% to $2.406 billion thanks to "higher sales volume driven by higher end-user demand for equipment and aftermarket parts, partially offset by the impacts of changes in dealer inventories."