Caterpillar posted a 21% increase in sales and revenue in the third quarter compared to the same period last year, for an increase of $2.6 billion.
In the company’s Construction Industries segment, sales increased by 19% to $6.3 billion, and profit rose 40% to $1.2 billion versus the prior year. Price realization and higher sales volume drove the increase, as price more than offset higher material prices, freight costs and manufacturing inefficiencies due to ongoing supply chain disruptions, Cat says.
In North America, Construction Industries segment sales were up 29% over the third quarter of 2021. Cat attributed the growth to strong pricing and a favorable change in dealer inventories.
“Dealers in North America decreased their inventories in the third quarter of last year, whilst we saw some build this year. North American dealer inventories still are very low, which impacts their ability to supply the region,” Chief Financial Officer Andrew Bonfield told participants on an October 27 earnings call.
Segment sales in Latin America also saw a dramatic increase (51%), while sales in EAME and Asia/Pacific were relatively flat.
Looking ahead, Cat says it expects the highest quarterly sales for the year to come in the fourth quarter, which is in line with typical seasonality. The company is also betting on a boost from infrastructure spending as a variety of constraints slow residential starts.
“Residential construction generally accounts for about 25% of sales in construction industries, while nonresidential is the remainder. In North America, residential construction is moderating due to tightening financial conditions but remains at relatively high levels,” said Chairman and CEO Jim Umpleby. “We expect nonresidential construction in North America to strengthen, supported by the impact of government-related infrastructure investments.”