Caterpillar’s Sales Surge as Construction Booms

Caterpillar’s revenue surged 22% in the second quarter as demand for its construction products rose despite higher prices.

Total revenue increased to $17.32 billion, lifted by higher sales across all three of its major segments, compared with $14.2 billion in the year-ago quarter. Analysts polled by FactSet expected total revenue and sales of $16.46 billion.

Caterpillar reported a second-quarter profit of $2.92 billion, or $5.67 a share, compared with $1.67 billion, or $3.13 a share, in the same period last year. Analysts polled by FactSet expected per-share earnings of $4.50.

The company said its sales benefited from dealers stocking up on inventory, as well as more sales directly to customers.

In the company’s energy and transportation segment, sales rose 27% as demand rose for engines and turbines. 

The construction-equipment manufacturer has faced higher costs of materials, which has prompted price increases. But those price increases haven’t caused customers to pull back: In the first quarter, the company also reported that it sold more construction equipment even as the goods became more expensive.

Caterpillar expects this demand to remain strong. Elevated U.S. spending on infrastructure, in part brought by the $1 trillion bipartisan infrastructure bill, has boosted sales of Caterpillar’s construction equipment. Nonresidential construction—projects on commercial buildings—account for a majority of the company’s equipment sales.

Caterpillar’s results come as the construction sector booms. Contractors have been inundated with projects from multifamily to infrastructure to industrial plants, prompting some concerns about the availability of workers and materials.

Shares of Caterpillar edged down 0.5% to $263.97 in premarket trading.

Write to Ben Glickman at [email protected]