By Rajesh Kumar Singh and Sanjana Shivdas
(Reuters) -Caterpillar Inc reported quarterly earnings that exceeded analyst estimates on Thursday, as demand for its machines was propelled by the fastest global economic growth since the 1970s.
The Illinois-based manufacturer of heavy machinery, a bellwether for economic activity, said stronger retail demand led dealers to boost inventories more in the latest quarter than a year ago, driving sales across all its three primary segments.
Adjusted profit was $2.87 per share, up from $1.65 per share a year earlier. Analysts surveyed by Refinitiv, on average, expected earnings of $1.94 per share.
The company's shares were up about 3% at $239.25 in premarket trading. The stock has surged 27% since its last earnings report, outperforming the broader blue chip Dow Jones Industrial Average.
Equipment sales rose 13% year-on-year to $11.2 billion, led by a 72% surge in construction machine sales in Asia.
"We're encouraged by improving conditions in our end markets and are proactively managing supply chain risks," said Caterpillar (NYSE:CAT) Chief Executive Jim Umpleby.
The International Monetary Fund said earlier this month that unprecedented public spending to fight the COVID-19 pandemic, primarily by the United States, would push global growth to 6% this year, the fastest pace since 1976, after the steepest annual downturn of the post-war era last year.
Investors are also betting rising commodity prices and the U.S. administration's proposed infrastructure stimulus will lift demand for Caterpillar's yellow bulldozers, mining trucks and other equipment.