Caterpillar Inc. on Thursday reported $15.86 billion in gross revenue for the first quarter of 2023, up 17 percent from the corresponding period in 2022 on higher sales volumes and realized prices.
The engine, equipment and locomotive maker’s gross revenue from its power and transportation segment rose 24 percent to $6.254 billion for the year. Quarter-on-quarter, the segment fell from $6.823 billion between October and December 2022. Total sales and revenue also fell sequentially, from $16.597 billion in the year-end quarter.
Caterpillar’s gross revenue rose 17 percent year over year.
The year-over-year increase in gross revenue of $2.273 billion “was due to favorable price realization and increased sales volume, partially offset by unfavorable currency impacts primarily related to the euro, Japanese yen and the Australian dollar. The increase in sales volume was driven by higher end-user equipment sales, partially offset by lower service sales volume,” Caterpillar said in a filing with the Securities and Exchange Commission of the USA.
Its three main segments (construction industries, resource industries and energy and transportation) recorded growth.
In energy and transportation, sales increased by $1.216 billion year over year with higher revenue “across all applications and cross-segment sales.” Oil and gas sales rose 39 percent compared to the opening quarter of 2022 and made up the largest share of the segment at $1.314 billion.
“Sales increased for reciprocating engine replacement parts and engines used in well maintenance and gas compression applications. Turbines and turbine-related services also increased,” Caterpillar said.
Its North American operations posted a 30 percent increase in gross revenue over the corresponding quarter of 2022, bringing in $7.95 billion, of which $7.458 billion came from machinery, energy and transportation sales. Latin America grew by 10 percent, while the Europe, Middle East and Africa region grew by nine percent. Asia-Pacific rose one percent.
The New York-listed company’s operating profit rose 47 percent to $2.731 billion in the year. Energy and transportation saw a 96 percent increase in operating profit to $1.057 billion, or $519 million between January and March 2022.
He noted: “In the first quarter of 2023, the divestment of the company’s Longwall business was completed, which had an unfavorable impact on operating profit of $586 million, primarily a non-cash item driven by the ‘release of accumulated foreign currency conversion’.
Adjusted earnings per share were $4.91.
However, despite beating profit forecasts, including the Zacks Consensus Estimate for a 30 percent margin in adjusted earnings per share, Caterpillar closed 0.86 percent lower at 214, $33, on the New York Stock Exchange.
Caterpillar expects higher power and transportation sales in the second half of 2023 compared to the first, President and CEO Jim Umpleby said on the earnings conference call.
“In oil and gas, alternative engines, while customers remain disciplined, we are encouraged by continued strength in demand for both well servicing and gas compression,” he said. “Demand for alternative power generation engines is expected to remain healthy, including strong data center growth. Orders and services for drilling rigs for solar turbines in both oil and gas and power generation ‘energy are robust’.
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