Caterpillar certainly has a knack for falling asleep on the stock market, before experiencing brutal up and down sessions. Often in the right direction, in fact. It's as if investors were constantly doubting the capabilities of the mechanical engineering giant, before being dazzled by its results.
This was once again the case on Tuesday, when the stock ended up nearly 9% after the publication of its quarterly results. A rise that, almost single-handedly, enabled the Dow Jones to escape the downturn that affected the S&P500 and Nasdaq.
After a long decade of stagnant sales, the machine builder returned to growth in 2022, posting $59.4 billion in revenues. On Tuesday, results for the second quarter of 2023 clearly exceeded investor expectations. In what is said to be a slowdown in the United States, sales soared by 21.6%, thanks to a sharp increase in sales and higher prices.
All three segments posted solid performances. The Energy & Transportation Division jumped 27% and the Mining Division 20%. Even the construction segment, up 19%, shone. Momentum was driven by North America (+32% in the region).
Margin progress was even more visible, with net profit almost doubling to $2.92 billion. Caterpillar expects the third quarter to be higher than last year, but lower than Q2.
Nevertheless, Caterpillar remains on the upswing, with a net margin expected to hit a record high of 14% this year and sales up 10%.