(Reuters) -Heavy machinery maker Caterpillar Inc topped Wall Street earnings estimates after reporting a 31% rise in profit on Thursday as a boost in U.S. infrastructure spending kept its order books full and softened the hit from higher manufacturing costs.
Shares in the world’s largest construction and mining equipment maker were up 3.2% in premarket trading after the company reported adjusted profit of $4.91 per share, beating Refinitiv analysts consensus of $3.78 per share.
The Biden administration’s infrastructure legislation encouraged spending in the construction sector, spurring demand for the machinery maker’s excavators, bulldozers and trucks.
Caterpillar‘s construction division recorded a 10% rise in total sales on the back of solid demand in North America which increased 33% year-over-year.
Its energy customers, grappling with aging machines and tight production capacity, also placed more orders for parts and engines as drilling activities surged with higher oil and gas prices.
Cost control measures that led the company to raise prices across its machinery lines over the past two years have buoyed top-line growth. Healthy demand, coupled with strong pricing, helped Caterpillar navigate higher material and freight costs amid ongoing supply challenges.
Caterpillar‘s sales and revenue for the quarter through March 31 rose to $15.9 billion from $13.6 billion a year ago.
(Reporting by Aishwarya Nair in Bengaluru Bianca Flowers in Chicago; Editing by Devika Syamnath and Elaine Hardcastle)
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