Caterpillar earnings jump despite supply chain hit
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New York (AFP) – Broad-based industrial growth propelled Caterpillar to higher third-quarter profits, according to results released Thursday, but executives said supply chain problems prevented even better earnings.
Chief Executive Jim Umpleby said supply chain difficulties were "more significant than we expected," preventing bigger sales increases as more of Caterpillar's industrial customers ramp up activity.
"We are having some challenges" in meeting demand due to supply chain problems, but it is "very difficult to quantify" the exact amount, Umpleby said during a conference call with analysts.
Umpleby described the difficulties in supply chain and logistics as "fluid," declining to prognosticate when things might improve.
"The good news is what is driving much of this is customer demand," he said, adding that the company had raised prices due to higher costs for freight.
Caterpillar, which manufactures equipment for the construction, mining and energy industries, suffered freight delays on some key items that slowed production.
Umpleby said Caterpillar has altered some manufacturing processes in light of the difficulties and added more inventory.
Caterpillar reported profits of $1.4 billion, a little more than twice the year-ago levels.
Revenues increased 25 percent to $12.4 billion. Total operating costs rose about 21 percent to $10.7 billion.
Shares rose 1.0 percent to $198.10 in pre-market trading.
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