Caterpillar Inc (NYSE: CAT) reported better-than-anticipated fiscal 2022 third-quarter earnings and revenues. The quarterly earnings report, which reflected the company’s ability to manage supply chain issues efficiently, brought huge cheer to the market. The stock of the heavy machinery manufacturer surged 7.71%, or $15.18, to close Thursday’s trading session at $212.14.
The Peoria, Illinois-based company reported third-quarter revenues of $14.99 billion, up 20.90% from $12.40 billion in the comparable period last year.
The rise in revenues was mainly due to propitious price realization and higher sales volume, partly negated by the negative currency exchange impact.
For the third quarter that ended September 30, 2022, Caterpillar reported a net profit of $2.04 billion, or $3.87 per share, compared with $1.43 billion, or $2.60 a share, in the third quarter that ended September 30, 2021.
Excluding restructuring costs, the company recorded a 3Q 2022 adjusted net profit of $2.08 billion, or $3.95 per share, an increase from $1.455 billion, or $2.66 per share, in 3Q 2021.
Analysts surveyed by Refinitiv had anticipated the company would report earnings of $3.16 per share on revenues of $14.33 billion.
Commenting on the quarterly earnings, Caterpillar’s Chairman and CEO, Jim Umpleby, said, “Our team remains focused on serving our customers as we continued to see healthy demand across most of our end markets during the third quarter.”
Segment wise,
- Construction revenues rose by 19% y-o-y to $6.276 billion.
- Resource industries revenues were $3.087 billion, an increase of 30% from last year.
- Energy & Transportation revenues grew by 22% y-o-y to $6.186 billion.
Overall, machinery, energy, and transportation revenues were $14.278 billion, up 22% on a y-o-y basis.
Financial product revenues increased by 4% to $716 million.
The company recorded other income of $242 million in the latest quarter, an increase from $225 million in the prior-year quarter. Also, the provision for income taxes reflected an expected annual tax rate of roughly 25%, compared with 23% last year.
The operating profit margin was 16.20% in 3Q 2022, an increase from 13.40% in 3Q 2021. The company returned $2 billion to shareholders in the form of share repurchases and dividends.
Notably, dealers’ inventories rose by $700 million in the September 2022 quarter, compared with a drop of $300 million in the September 2021 quarter.
The earnings beat is expected to keep the stock of Caterpillar slightly bullish in the days ahead.
The historical price chart indicates that the stock of Caterpillar is rising after testing the support at 170. The next major resistance is anticipated near 230. Additionally, the stock is trading above its 50-day moving average while the MACD indicator is showing a positive reading. Therefore, we anticipate the stock to remain in an uptrend for the next few days.
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