Strong industrial demand in most leading markets lifted Caterpillar’s results last quarter, but the US heavy equipment maker said on Tuesday it was facing ongoing supply chain problems.
With the exception of China, where Covid-19 restrictions limited operations, Caterpillar saw “healthy demand in most of our end markets,” Chief Executive Jim Umpleby said in a statement.
Price increases “more than offset” increased manufacturing costs, Umpleby told analysts on a conference call as the company reported higher sales in all three of its businesses: construction, resources and energy, and transportation.
Profits rose 18 percent to $1.7 billion on revenue up 11 percent to $14.2 billion.
Umpleby said the company still hasn’t seen any significant improvement in the supply chain and the condition of key materials and components remains unpredictable.
“It’s still a melee,” Umpleby told analysts.
“It changes from component to component. One day it’s a problem. One day it’s a different problem. But on a macro level we haven’t seen any improvement.”
And he said Caterpillar has yet to see any benefit from the fall in metal and energy prices, which fell 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 haven’t seen any declines from our suppliers due to commodity price reductions,” Umpleby said. “It takes a while for changes like this to take hold in the supply chain.”
Caterpillar’s results led to better-than-expected earnings per share, but lower earnings than analysts had forecast.
The company’s shares fell 3.6 percent to $187.82 in morning trading.
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