Caterpillar (CAT) Q1 Earnings Top Estimates On Improving Demand

The Construction Industries segment witnessed a 62% surge in operating profit to $1 billion courtesy of higher volume. The Resource Industries segment’s operating profit increased 8% year over year to $328 million in the quarter under review. Gains from favorable manufacturing costs and higher sales volume were somewhat negated by unfavorable price realization and higher SG&A/R&D expenses.

Financial Products’ revenues climbed 7% to $761 million from the prior-year quarter. Financial Products' profits were $244 million in the reported quarter — a whopping improvement of 132% year over year. This was due to a favorable impact from equity securities in Insurance Services and lower provision for credit losses at Cat Financial, partially offset by an increase in SG&A expenses.


Strong Cash Position

At the end of the first quarter, operating cash flow was $1.9 billion compared with $1.13 billion in the prior-year quarter. Caterpillar ended the first quarter with cash and short-term investments of $11.3 billion compared with $9.3 billion as of 2020 end.

Price Performance

Over the past year, Caterpillar stock has gained 93.5%, compared with the industry’s rally of 94.3%.

Zacks Rank & Other Stocks to Consider

Caterpillar currently carries a Zacks Rank #2 (Buy). 

Some other top-ranked stocks in the Industrial Products sector include Astec Industries, Inc. (ASTE Quick Quote ASTE - Free Report), Dover Corporation (DOV Quick Quote DOV - Free Report), and Pentair plc (PNR Quick Quote PNR - Free Report), each carrying a Zacks Rank of 2, at present.

Astec Industries has an estimated earnings growth rate of 14.3% for the ongoing year. The company’s shares have rallied 92% in the past year.

Dover has a projected earnings growth rate of 21.8% for 2021. Over the past year, the company’s shares have gained 54%.

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