New York (AFP) - Caterpillar reported strong second-quarter profits Tuesday behind robust demand for industrial equipment and an improving cost environment that boosted profit margins.
The company -- an industrial bellwether tied to the construction, mining, energy and other sectors -- also offered an upbeat forecast, saying that 2023 profit margins would be "close to the top" of the forecast.
Chief Executive Jim Umpleby said the results reflected "healthy demand across most end markets" for Caterpillar machines.
"We're closely monitoring economic conditions, but we do feel good about the business," Umpleby told analysts.
Profits were $2.9 billion, up nearly 75 percent on the year-ago level as revenues jumped 22 percent to $17.3 billion.
Profit margins topped estimates due to improved volumes and lower manufacturing costs, including freight, Umpleby said.
The operating profit margin was 21.1 percent, up from 13.6 percent in the year-ago period.
Umpleby described the supply chain as improving, enabling improvements in output.
"However, areas of challenge remain, particularly for large engines, which impacts energy and transportation and some of our larger machines," he said.
Shares jumped 7.2 percent to $284.33 in morning trading
Caterpillar "unearthed excellent Q2 results despite economic unease," said Briefing.com.
"Although macroeconomic uncertainties will likely liner for the foreseeable future, construction activity is looking healthy, especially in North America and the Middle East."
