Caterpillar (NYSE:CAT) topped Wall Street earnings estimates after reporting a 31% rise in profit on Thursday as a boost in U.S. infrastructure spending kept its order books full and softened the hit from higher manufacturing costs.
Shares in the world’s largest construction and mining equipment maker rose as much as 3% in premarket trading but reversed course after the company noted an increase in dealer inventories and a slowdown in orders.
The company reported an adjusted profit of $4.91 per share, as compared to analysts’ consensus of $3.78 per share.
The Biden administration’s infrastructure legislation encouraged spending in the construction sector, spurring demand for the machinery maker’s excavators, bulldozers and trucks.
Caterpillar’s construction division recorded a 10% rise in total sales on the back of solid demand in North America which increased 33% year-over-year.
Its energy customers, grappling with aging machines and tight production capacity, also placed more orders for parts and engines as drilling activities surged with higher oil and gas prices.
In the last eight quarters, CAT has met or beaten revenue estimates five times. The industrial powerhouse is still benefiting from strong sales to the energy and mining sectors.
The Texas-based company’s resources and mining division profit rose 112% while sales in the company’s energy and transportation segment saw a 24% increase year-over-year.
Caterpillar’s sales and revenue for the quarter through March 31 rose to $15.9 billion from $13.6 billion a year ago.
CAT shares stumbled $8.11, or 3.8%, to $208.08.
