Caterpillar's sales rose in the first quarter as market conditions for the machinery company begin to improve and dealers increase their inventory levels.
Revenue climbed to $11.89 billion from $10.64 billion thanks to increased sales volume driven by higher end-user demand and changes in dealer inventories. Dealers boosted inventories by $700 million during the first quarter compared with $100 million in the prior-year period.
The performance easily beat the $11.05 billion in revenue analysts polled by Zacks Investment Research expected.
Sales for the construction industries segment rose 27%. North American sales climbed slightly, with higher end-user demand driven mostly by residential construction.
The construction industry has been dragged down by the global spread of COVID-19, particularly in the U.S., but increasing vaccinations and loosening of restrictions is helping various business sectors get back on their feet.
The pandemic has also led to strong housing demand in many areas, as people working from home continue to hunt for homes that can accommodate their needs.
Sales of new homes surged 20.7% in March to the highest level since 2006, the Commerce Department reported last week. While sales of existing homes fell last month, it was because there are so few on the market and prices jumped 17.2% due to intense competition among buyers, the National Association of Realtors said.
"We're encouraged by improving conditions in our end markets and are proactively managing supply chain risks," Chairman and CEO Jim Umpleby said in a statement.
For the three months ended March 31, Caterpillar Inc. earned $1.53 billion, or $2.77 per share. A year earlier it earned $1.09 billion, or $1.98 per share.
Stripping out restructuring costs and other items, earnings were $2.87 per share. That's well above the $1.93 per share that Wall Street was looking for.
Shares of the for the Deerfield, Illinois, company rose about 2% before the opening bell.