Caterpillar profit rises on construction equipment demand

A Caterpillar 777 autonomous mining truck is displayed during CES 2023, an annual consumer electronics trade show, in Las Vegas, Nevada, U.S. January 6, 2023. REUTERS/Steve Marcus/ File Photoreported a rise in third-quarter profit on Tuesday, as strong infrastructure investments across key markets boosted demand for its high-end construction equipment.

Demand for heavy equipment has been on the rise as the United States upgrades its roads, railways and other transportation infrastructure under a $1 trillion package approved by the Senate in 2021 under the Biden Administration.

Caterpillar’s profit has also benefited from effective cost controls and price hikes shielding margins amid ongoing inflationary pressures. The manufacturer’s profit margins have been aided by a strong order backlog for construction equipment and robust demand from customers in oil and gas, power generation, rail and defense.

Last quarter executives said solid demand for heavy machinery from construction and mining industries was expected to drive full-year operating margin toward the top end of its prior forecast. Caterpillar’s sales and revenue was up across all equipment segments with its construction division recording the highest bump a 12% rise in sales on the back of healthy demand in North America, as the Biden Administration’s $1.2 trillion infrastructure law has spurred spending on U.S. roads, railways and bridges.

Its profit rose to $2.79 billion, or $5.45 per share, from $2.04 billion, or $3.87 per share, a year earlier.Bianca Flowers is an award-winning multimedia journalist based in Chicago where she reports on the backbone of the U.S. labor market. She covers agriculture and construction equipment manufacturing. She also writes about supply chains, food production, union strikes, and how the future of farming coincides with technological innovation.

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