Caterpillar charging forth

MINING and construction equipment maker Caterpillar has finished the September quarter with its operating profit up 46% year on year to US$2.4 billion.
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Mining is still trucking along nicely for Caterpillar.

The increase was thanks to favourable price realisation and higher sales volumes, partially offset by higher manufacturing and research and development costs and higher selling, general and administrative expenses.

The unfavourable manufacturing costs largely reflected higher material costs, freight and manufacturing inefficiencies.

SG&A/R&D expenses mainly increased due to investments aligned with Caterpillar's plan for profitable growth and higher short-term incentive compensation expenses.

Operating profit margin for the quarter was 16.2% compared with 13.4% for the September quarter 2021.

Caterpillar finished the nine months to September 30 with operating cash flow of $5 billion and the September quarter with $6.3 billion of enterprise cash.

Total sales revenues for the quarter were $15 billion, up $2.6 billion, or 21%, on the 2021 September quarter.

Sales were higher across Caterpillar's three primary segments of Construction Industries, Resources Industries and Energy & Transportation.

Resources Industries total sales for the quarter were $3.1 billion, up 30% on the same time last year.

The increase in sales volumes was due to the impact of changes in dealer inventories, higher sales of aftermarket parts, and higher sales of equipment to end users.

Dealer inventory decreased during the September quarter of 2021 but rose in the September quarter of 2022.

Resources Industries' profit was $506 million for the quarter, up 81% on the 2021 September quarter. This was mainly due to favourable pricing and higher sales volumes.

Sales leapt 66% in North America year on year to $1.1 billion. Last year the Asia Pacific region, of which Australia makes up the lion's share, was the biggest sales segment with $744 million. Sales in that region rose 20% to $893 million.

Energy & Transportation's total sales were $6.2 billion, up 22% on the same time last year.

The segment's profit was $935 million, up 32% on the previous corresponding period.

Construction Industries total sales were $6.3 billion for the quarter, up 19% on the 2021 September quarter.

In a research note Argonaut Securities said it looked like the mining sector was still "trucking along".

"Impressive result for this bellwether considering the world's meant to be slowing down," it said.

Caterpillar chairman and chief executive officer Jim Umpleby said healthy demand was expected across most of the company's end markets.