Resurgent demand drives sales in third quarter

Business News

FILE – A mason shovels a cement mixture as he prepares to lay down bricks on the exterior wall of a new house in Flowood, Miss., Sept. 23, 2021. U.S. home construction fell 1.6% in September as builders continue to be tripped up by supply chain bottlenecks. The Commerce Department reported Tuesday, Oct. 19, 2021 that the decline in September left home construction at a seasonally adjusted annual rate of 1.56 million units, 7.4% above the rate one year ago. (AP Photo/Rogelio V. Solis, file)

Construction demand drove third quarter sales higher at Caterpillar as did rising demand from miners and other heavy industry as the global economy emerges from the pandemic.

Revenue climbed 25% to $12.4 billion from $9.88 billion, and in the construction industry unit, revenue increased to $5.26 billion, from $4.06 billion.

Despite falling just shy of Wall Street projections on revenue, shares of Caterpillar Inc. jumped more than 3% before the opening bell Thursday.

Dealers lowered inventories by $300 million in the third quarter, a considerable improvement from the $600 million cut a year earlier, the Deerfield, Illinois, company reported.

Net income was $1.43 billion, or $2.60 per share, for the period ended Sept. 30. A year earlier it earned $668 million, or $1.22 per share.

Removing certain items, earnings were $2.66 per share. This easily beat the $2.26 per share that analysts had projected, according to a survey by Zacks Investment Research.

The construction industry was hit by the spread of COVID-19 like all others, but the pandemic did drive housing, and construction, demand as people sought larger or new places to live. Mining and construction have taken off this year as well as industries begin to elevate production.

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