Caterpillar Q2 earnings: CEO dubs AI a ‘positive thing for business’

By:
on Aug 1, 2023
Listen
  • Caterpillar Inc reports better-than-expected results for its fiscal Q2.
  • CEO Jim Umpleby discussed the quarterly update with CNBC today.
  • Caterpillar stock is now up more than 40% versus its recent low.

Follow Invezz on Telegram, Twitter, and Google News for instant updates >

Shares of Caterpillar Inc (NYSE: CAT) are trading at a record high this morning after the equipment manufacturer reported its financial results for the second quarter that handily topped Street estimates.

Are you looking for signals & alerts from pro-traders? Sign-up to Invezz Signals™ for FREE. Takes 2 mins.

Caterpillar’s view on the current quarter

Copy link to section

The stock is up even though Caterpillar said its sales and profit margin will be down sequentially in the current quarter. According to CEO Jim Umpleby:  

That’s in line with our normal seasonal pattern. That shouldn’t be a surprise. We’re still dealing with some supply chain issues; the situation has improved but we do have areas of challenge.

Wall Street currently has a consensus “overweight” rating on the industrial stock that is already up more than 40% versus its year-to-date low.

Among its notable bulls is the famed investor and Mad Money host Jim Cramer.

Caterpillar Q2 earnings snapshot

Copy link to section
  • Earned $2.92 billion versus the year-ago $1.67 billion
  • Per-share earnings also climbed from $3.13 to $5.67
  • Adjusted EPS printed at $5.55 as per the press release
  • Revenue jumped 21.6% year-on-year to $17.32 billion
  • Consensus was $4.57 a share on $16.46 billion in revenue

On CNBC’s “Squawk on the Street”, the Chief Executive also dubbed the rising focus on artificial intelligence a meaningful benefit for Caterpillar.

We see backup generator sets for data centres. That business is quite strong, driven by AI. It’s also increasing total energy demand which we think is a positive thing for our business.

Caterpillar noted broad-based sales growth

Copy link to section

Price realization and sales volume were a $1.42 billion and a $1.77 billion benefit in the recently concluded quarter.

Most importantly, thought Caterpillar noted a better-than-expected double-digit percentage growth in each of its business segments. CEO Umpleby added in his interview with CNBC:

The good news is; even with Chinese market below the 5.0% to 10% typical range, we produced record results [as] we serve a diverse set of end markets.

Caterpillar improved its operating profit margin in the second quarter by an exciting 750 basis points to 21.1%.

Ad

Want easy-to-follow crypto, forex & stock trading signals? Make trading simple by copying our team of pro-traders. Consistent results. Sign-up today at Invezz Signals.

Learn more
USA Agriculture stocks Earnings Reports Manufacturing North America Stock Market World