General Results:
Caterpillar posted impressive second-quarter earnings, beating Wall Street's expectations with significant contributions from the construction sector. The boost in infrastructure spending, particularly President Joe Biden's infrastructure bill, led to higher construction equipment demand, causing a 75% increase in adjusted profits to $5.55 per share from the same period last year. Group revenues rose 21.4% to $17.3 billion, and operating profit margin was at 21.1%, a notable jump from last year's 13.6%. Construction sales were up 19%, while resource, energy, and transportation sales grew by 27%. The company also successfully offset rising freight and material costs through equipment price increases.
Management Comments and Forecasts:
CEO Jim Umpleby expressed satisfaction regarding the strong operational performance, noting the double-digit top-line growth and record adjusted profit per share. Emphasizing the commitment to customer service, strategy execution, and investment for long-term profitable growth, the comments reflect confidence in continued healthy demand. Despite global economic concerns and challenges related to supply chain issues since the pandemic's onset, Caterpillar seems to have shaken off these hurdles and is experiencing robust demand.
Most Important Financial Metrics:
- Adjusted profits: $5.55 per share, up nearly 75% y/y
- Group revenues: $17.3 billion, up 21.4% y/y
- Operating profit margin: 21.1%
- Construction sales: $7.15 billion, up 19% y/y
- Resource, energy, and transportation sales: up 27% to $7.23 billion
- Adjusted operating income: $3.68 billion
- Machinery, Energy & Transportation segment revenue: $16.55 billion, +22% y/y
- Financial Products segment operating income: $257 million, +9.8% y/y
- Returned $2.0 billion to shareholders through share repurchases and dividends in the quarter
Caterpillar (CAT.US) - price is close to historical highs. After announcing good results, the company gains +1.63% in pre-market trading, with the stock price around 266.8 dollars. Despite good results, the average analysts' forecasts assume a drop in the stock price to 245.67 dollars in the annual perspective. This level is also reflected on the chart and coincides with the support level, which could be reached in the case of a correction, D1 interval, source xStation 5
