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(Reuters) -Heavy-equipment maker Caterpillar Inc (NYSE:CAT) on Thursday topped Wall Street estimates for profit and revenue as the industrial bellwether continued to benefit from equipment price increases and elevated energy prices.
Shares for the world’s largest construction and mining equipment manufacturer were up 5.6% in premarket trading.
Net income for the Deerfield, Illinois-based company rose to $2.04 billion, beating analysts’ estimates for $1.68 billion. Revenue increased to $15 billion, topping predictions of $14.3 billion, according to Refinitiv.
“We continued to see healthy demand across most of our end markets during the third quarter,” Chief Executive Jim Umpleby said.
Caterpillar raised prices last year to help mitigate supply chain constraints and rising raw material and freight costs, a move that has so far cushioned profits.
“The increase in sales volume was driven by dealer inventory changes, higher sales to end users, and higher services,” Cowen analyst Matt Elkott said in a note.
Demand for Caterpillar’s machines that are used in everything from homebuilding to mining is an indicator of business confidence and broader economic activity. Operating margins for its construction division were up 19.4%.
In the previous quarter, the company had flagged a bigger drop in demand for its excavators in its growth market, China.
Revenue for construction equipment in Asia Pacific region rose 1% from the previous year. Slumping sales in China have weighed on the manufacturer’s margins as developers halted or delayed construction on presold homes because of debt woes.
A delayed release of China’s economic data showed the economy losing momentum as COVID-19 lockdowns, falling property values and constrained consumption slowed the world’s second largest economy.
With drilling activity surging in the first half of the year amid soaring energy prices, Caterpillar’s resource division saw the biggest increase in sales, up 30%.
Caterpillar’s adjusted profit rose to $3.95 per share, outpacing estimates of $3.16 per share.
