Caterpillar Inc.

We believe Caterpillar's performance could have been even stronger if it weren't for the supply chain issues, as its suppliers are experiencing availability issues and freight delays. Despite the strong demand for Caterpillar's products, we believe dealer inventories are still relatively low. Dealers decreased inventory by about $300 million in the third quarter versus a decrease of approximately $600 million in last year's third quarter. Dealer inventories are flat relative to the end of 2020. The stable outlook reflects our view that we believe Caterpillar will continue performing well over the next 18-24 months and operate with significant cushion in its credit metrics. Specifically, we believe the company will maintain FFO to debt well in excess of the 30% that

...All of Caterpillar's segments are showing strong growth after pandemic-related declines in 2020. The quicker-than-anticipated global economic rebound is resulting in strong demand for Caterpillar's products. We previously anticipated it would take several years for revenue to return to pre-pandemic levels, but it now appears Caterpillar will approach that level in 2021 and could potentially surpass it in 2022. Total revenues grew 25.5% in the third quarter over the same period last year. The company's construction industries, resource industries, and energy and transportation segments displayed strong double-digit revenue growth in the third quarter of 2021. While the inflationary environment presents a cost headwind, customer demand is improving in its resource industries segment, evidenced by low parkings (or idled equipment). In energy and transportation, the recent increase in oil and gas prices, as well as strength in power generation, should help support revenue growth. Recently,...

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