Strong industrial demand in most leading markets lifted Caterpillar’s results in the latest quarter, but the US heavy equipment maker said Tuesday it faced persistent supply chain problems.
With the exception of China, where Covid-19 restrictions constrained activity, Caterpillar saw “healthy demand across most of our end markets,” Chief Executive Jim Umpleby said in a statement.
Price hikes “more than offset” elevated manufacturing costs,” Umpleby told analysts on a conference call, as the company reported higher sales across all three operating divisions: construction industries, resources and energy, and transportation.
Profits rose 18 percent to $1.7 billion on an 11 percent increase in revenues to $14.2 billion.
Umpleby said the company still had seen no appreciable improvement in the supply chain, and the state of key materials and components remains unpredictable.
“It’s still hand-to-hand combat,” Umpleby told analysts.
“It changes from component to component. One day, it’s one issue. One day, it’s another issue. But at the macro level, we have not seen an improvement.”
And he said Caterpillar had yet to see any benefit from the pullback in metals and energy prices, which have retreated somewhat from their peaks earlier in the spring shortly after the Russian invasion of Ukraine.
“We’re still dealing with an inflationary environment and we have not seen a decrease from our suppliers as a result of commodity price reductions,” Umpleby said. “It takes a while for those kind of changes to work their way through the supply chain.”
Caterpillar’s results translated into better-than-expected earnings-per-share, but lower revenues than analysts projected.
The company’s shares fell 3.6 percent in mid-morning trading to $187.82.
