Caterpillar reports big profit and revenue beats, but stock drops as costs surge

Caterpillar Inc. reported Friday big profit and revenue beats, as sales of all three of its major business segments rose above expectations, but the stock dropped 1.7% premarket as cost increases outpaced sales growth. Net income nearly tripled, to $2.12 billion, or $3.91 a share, from $780 million, or $1.42 a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share rose to $2.69 from $2.12, well above the FactSet consensus of $2.26. Revenue grew 22.8% to $13.80 billion, beating the FactSet consensus of $13.17 billion. Meanwhile cost of sales outpaced sales growth, rising 28.5% to $10.00 billion to top expectations of $9.21 billion. For sales of the company’s business segments, Construction Industries rose 27% to $5.74 billion, Energy & Transportation increased 19% to $5.73 billion and Resource Industries grew 27% to $2.76 billion. “Amid ongoing supply chain constraints, our team continues to execute our strategy for long-term profitable growth while striving to meet customer demand,” said Chief Executive Jim Umpleby. The stock has gained 4.0% over the past three months while the Dow Jones Industrial Average has lost 4.4%.

Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.