CAT - Caterpillar Receives a Boost From an Unexpected Source
2023-09-17 08:02:00 ET
Caterpillar (NYSE: CAT) and its Japanese rival Komatsu are the two leading players in the global construction and mining machinery markets. Therefore, what one of them says about its end markets has direct relevance to what the other will report. Consequently, Caterpillar investors have reason to feel positive about trading in the company's third quarter. Here's why.
Caterpillar is best known for its highly visible construction machinery. Still, a quick look at a breakout of its industrial segment profit shows that its resource industries (mining and aggregate machinery) and energy and transportation segments together produced profits equivalent to its construction industries segment.
In addition, note that the profit increase in the resource industries segment is more than half the increase in the construction industries segment from 2021 to 2022 -- a reflection of the cyclicality of the resource industries segment and just how much the segment can improve profitability when its end markets are in good shape.
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Caterpillar Receives a Boost From an Unexpected Source