Caterpillar's sales surged 14% in the first quarter as the construction machinery and equipment company saw strong demand from higher end-users and increased inventories from dealers compared with the same period a year ago.
The company reported an adjusted profit of $2.88 per share, beating Wall Street analysts' estimates of $2.60 per share. Total revenue for the quarter totaled $13.6 billion, beating expectations of about $13.4 billion. Revenue totaled $11.9 billion in the year-ago period.
"I’m proud of our global team’s performance as they achieved double-digit sales growth despite ongoing supply chain challenges," Caterpillar chairman and CEO Jim Umpleby said in a statement. "We remain focused on supporting our customers and executing our strategy for long-term profitable growth."
Caterpillar's construction industries segment sales grew 12% year over year to $6.12 billion. The segment's higher sales volume in the U.S. was driven by demand for equipment and aftermarket parts from improving nonresidential construction, as well as continued strength in residential construction and the impact of changes in dealer inventories.
The resource industries segment saw sales jump 30% year-over-year to $2.83 billion, driven by the impact of changes in dealer inventories and higher end-user demand for aftermarket parts. The energy and transportation segment's sales rose 12% to $4.51 billion.
Dealers increased inventories by $1.3 billion during the first quarter of 2022, compared with an increase of $700 million during the first quarter of 2021.
Caterpillar dealt with rising costs in the quarter. Costs and expenses totaled $11.73 billion, up 13% from a year ago. The company said higher manufacturing costs primarily reflected more expensive material and freight costs. Operating profit margin was 13.7% for the first quarter of 2022, compared with 15.3% for the first quarter of 2021.
The results come as housing demand has been on fire during the pandemic as millions of people relocated or buy a first home, but rising mortgage rates may start to dampen that. A run-up in rates is setting the stage for a slowdown in home sales this year as increased borrowing costs reduce would-be buyers’ purchasing power.
The Associated Press contributed to this report