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Caterpillar Reports Improved Quarter Earnings- Raises Supply Chain Issues

By John F. Heerdink, Jr.

 Caterpillar, Inc. (CAT) reported strong quarterly earnings last week and raised concerns over the global shortage of semiconductor chips, which could affect its ability to keep up with increasing customer orders.

Chief Financial Officer Andrew Bonfield informed that the company is witnessing recovery in most of its markets around the world, but the supply situation related to chips remained “dynamic and very fluid” and may impact production later this year.

“We may not be able to satisfy all the end-user demand out there,” Bonfield told Reuters. “And that’s the challenge which we are trying to manage.”

Bonfield also discussed how the company is spending more on freight to get goods to its factories on time. Caterpillar expects high raw material prices, particularly steel, which is expected to hurt from the quarter through June. The demand for Caterpillar’s yellow bulldozers, mining trucks, and other equipment witnessed a boost from a recovery in the global economy.

Adjusted profit for the first quarter stood at $2.87 per share, an increase from $1.65 per share a year earlier. Equipment sales increased 13% y-0y in the quarter to $11.2B, driven by a 72% surge in construction machine sales in Asia.  Caterpillar did not provide an earnings forecast for this year.

Dow 30 Component Caterpillar, Inc. (CAT) is the world’s chief manufacturer of diesel and natural gas engines, construction and mining equipment, industrial gas turbines, and diesel-electric locomotives. Caterpillar, Inc. also works to make sustainable progress possible and contributes to driving positive change on every continent. To learn more about Caterpillar, Inc. (CAT) and to continue to track its progress please visit the Vista Partners Caterpillar, Inc. Coverage Page.

Vista Partners LLC (”Vista”) is a California Registered Investment Advisor based in San Francisco. Vista delivers timely and relevant insights via the website: www.vistapglobal.com with daily stories, weekly market updates, monthly macroeconomic newsletters, podcasts, & Vista’s proprietary equity and market research to help you stay informed and stay competitive. Vista’s mission is to invest partner capital while arming investors with a comprehensive global financial perspective across all market sectors. Vista also seeks to provide select issuers with actionable advice regarding fundamental development, corporate governance, and capital market directives.

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(Read Original Story: Caterpillar flags supply-chain risks as global recovery boosts earnings in Reuters)


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