North America strong for Caterpillar

Caterpillar has reported a 14% increase in first quarter sales to US$13.6 billion, driven by healthy growth in its resource, construction and energy/transport divisions.

Operating profits of $1.85 billion were up 2% year-on-year, with higher prices and volumes almost offset by higher material and freight costs.

Cat said higher prices and volumes offset supply chain costs in the first quarter of 2022.

Cat’s Chairman and CEO Jim Umpleby said he was proud of the double-digit growth performance, which had been achieved “despite ongoing supply chain challenges.”

There was little mention of the impact of the war in Ukraine – which began two months into the quarter - other than a higher reserve for credit losses in Ukraine and Russia at Cat Financial Products. The reserve has increase by $20 million to $347 million compared to the end of the first quarter in 2021.

Sales at the construction division were up 12% year on year, led by a 28% rise in North America, +60% in Latin America and +18% in EAME. Lower demand in China led to a 21% reduction in revenues for Asia Pacific, although there was growth in most other Asian markets.

The resources segment saw a 30% increase compared to the first quarter or 2021, with sales up significantly in every region except Latin America. Resource revenues in North America grew by 55% in the period.

Umpleby said; “We remain focused on supporting our customers and executing our strategy for long-term profitable growth. Our strong balance sheet allowed us to repurchase shares and pay dividends totalling $1.4 billion in the quarter.”