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April 29, 2021 11:00 AM, EDT

Caterpillar Says Chip Shortage May Hurt Equipment Deliveries

Caterpillar equipmentLuke Sharrett/Bloomberg News

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Caterpillar Inc. is warning of potential impacts ahead due to a global chip shortage, putting a damper on better-than-expected earnings for the world’s biggest maker of mining and construction equipment.

“Although we haven’t been impacted yet, the global semiconductor shortage may have an impact later this year,” Chief Financial Officer Andrew Bonfield said April 29. “It’s a risk and obviously we’re keeping a close eye on it.”

The cautionary words come after Caterpillar posted first-quarter revenue and profit that topped analysts’ estimates, in what Bonfield described as “very strong performance” for the start of the year fueled by construction growth in the U.S. and China.

Caterpillar joins some of the world’s biggest automakers and tech giants in highlighting the impacts of a chip shortage that’s already caused Honda Motor Co. to halt output at Japanese plants and Apple Inc. and Samsung Electronics Co. in flagging production cuts and lost revenue.

The shortfall comes as Caterpillar expects a big ramp-up in machinery production through the rest of the year. While the company has been able to mitigate the issue so far, Bonfield said such shortages could mean Caterpillar may not be able to fully meet demand from its customers this year.

Caterpillar’s quarterly results surpassed Wall Street’s expectations, with sales jumping 12% to $11.9 billion in the period and per-share adjusted earnings of $2.87 topping the $1.95 a share average estimate of analysts’ estimates compiled by Bloomberg.

Shares of Caterpillar rose 1% to $234.53 at 9:30 a.m. trading in New York.

Caterpillar has been riding high on expectations for a sales recovery, with the stock coming off its best quarter in more than a decade in a bet on improving orders amid mass vaccine rollouts and signs of rebounding industrial demand.

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