Caterpillar says 2024 profits will be higher than expected

(Times Of Update) — Caterpillar Inc. said it expects its annual profit to be higher than expected, despite slightly lower sales for the full year.

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The maker of the iconic yellow excavators said full-year adjusted profits will now be higher than expected, while its profit margins will exceed its target range.

Caterpillar, one of the world’s largest producers of heavy machinery, is seen as a bellwether for industrial activity as a key supplier to industries ranging from construction and mining to energy and transportation.

Caterpillar reported adjusted profit of $5.99 per share on Tuesday, beating analysts’ average estimates compiled by Times Of Update. Sales volumes declined in the quarter, while pricing was favorable.

Profit increased 20% from a year earlier in the energy and transportation segment, driven by demand for turbines and turbine-related services in the oil, gas and power sectors. The construction and resources segments both declined slightly. The construction unit reported higher sales in Latin America, while volumes were flat in North America and declined elsewhere in the world.

The company reported an increase in dealer inventories in the second quarter, while its order backlog, which is seen as an indication of demand for its machines, increased from the first quarter.

Sales and revenue for the second half are expected to be slightly higher than the first half, although the full-year total is now expected to decline.

(Updated with outlook from first paragraph.)

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