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es, we're still dealing with an inflationary environment, and we have not seen a decrease from our suppliers as a result of commodity price reductions.
As you know, it takes a while for those kind of changes to work their way through the supply chain. And of course, there's volatility there as well.
the drop in metals/energy hasn't fed into CAT supplier cost yet
Transcript
2022 Q2
15 Aug 22
the delta between price and manufacturing costs, which is really the most important part from our perspective, will actually get wider and that really is to help us actually catch back up some of the shortfalls we've seen over the previous few quarters.
So from a margin perspective, that will be a positive.
pricing power good so proce>manu cost
Transcript
2022 Q2
15 Aug 22
Having said that, we're encouraged by the conversations that we're having with our mining customers. They're making decisions based on a very long-term view
mining still conservative on spending
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2022 Q2
15 Aug 22
So our backlog increase of $2 billion was primarily driven -- was led by Energy & Transportation. And as we've mentioned previously, we have seen an increase in orders from solar turbines oil and gas customers that will start to impact us in late 2022 and into 2023.
Our backlog in Resource Industries remains healthy and would have increased if not for some Russia cancellations that we had.
So again, as we look forward, we're not making a prediction about 2023. But again, that strong backlog does help us feel good.
The other thing is Construction Industries, the infrastructure bill, we believe it will start to impact us in late 2022 and into 2023.
So again, for those -- I'll provide that as color, although obviously, we're not making a 2023 prediction at this point.
backlog commentary, E & T up on orders, RI impacted by Russia, CI -- ingrastruvture bill to hirt late 2022 /2023
Transcript
2022 Q2
15 Aug 22
Your second question, we have not seen a significant improvement in supply chain. It's still hand-to-hand combat.
Our teams are working way through those issues. Again, very proud of the team that they're able to turn in double-digit sales growth despite those supply chain challenges, but we have not seen them ease. It changes from component to component. 1 day, it's one issue, 1 day, it's another issue. But at the macro level, we have not yet seen an improvement.
no improvement in supply chain as yet
Transcript
2022 Q2
15 Aug 22
For the second half of the year, both the enterprise and segment levels, we anticipate adjusted operating profit margin improvement compared to both the first half and the comparable periods of 2021. The impact of price actions should accelerate and though we anticipate continued increases in manufacturing costs, we are starting to let the significant increases, particularly in freight and material costs, that we saw in the second half of the last year.
mgn improvement to come, pricing to offset manufacturug cists
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2022 Q2
15 Aug 22
Pricing was better than expected, while sales of equipment to end users lagged our expectations due to supply chain challenges and additional weakness in China.
eq sales lagged expectations (supply chain and china)
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2022 Q2
15 Aug 22
Energy & Transportation
e & t bonfield
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2022 Q2
15 Aug 22
Resource Industries sales increased by 16% in the second quarter to $3 billion. The improvement was primarily due to favorable price realization and higher sales volume. Volume increase on sales of aftermarket parts.
Second quarter profit for Resource Industries increased by 2% to $355 million as price and volume more than offset unfavorable manufacturing costs, which largely reflected higher material and freight cos
RI bonfield
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2022 Q2
15 Aug 22
Construction Industries.
CI bonfield
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2022 Q2
15 Aug 22
Volume decreased slightly as lower sales of equipment to end users was mostly offset by higher sales of aftermarket parts. North America had the highest growth in sales dollars, a 20% increase due to strong pricing, a favorable change in dealer inventory and continued strength in services. Sales of equipment to end users lagged the prior year slightly, driven by supply chain challenges.
services and afgtermarjet made up for machine sales decline
Transcript
2022 Q2
15 Aug 22
Price realization was better than we had anticipated due to the strong demand for machines. Manufacturing costs were also slightly higher than expected, primarily due to continued material and freight cost pressures as well as the impact of supply chain on our factory performance. Overall, price exceeded manufacturing costs for the quarter, which reverses the trend we had seen for most of the past year.
pricing good but cost up too
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2022 Q2
15 Aug 22
Machine sales to users were impacted by supply chain challenges was slightly worse than we had anticipated. Overall, we are not seeing signs of slowing demand as order levels and backlog remain healthy
no sign of sl;owing demand
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2022 Q2
15 Aug 22
Energy & Transportation
E & T outlook
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2022 Q2
15 Aug 22
Resource Industries
RI outlook
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2022 Q2
15 Aug 22
Construction Industries
CI outlook
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2022 Q2
15 Aug 22
we expect price will more than offset these cost increases for the full year.
price to more than offset cost
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2022 Q2
15 Aug 22
We also announced we're increasing our quarterly cash dividend by 8% to $1.20 per share. We remain proud of our dividend aristocrat status.
divi raise
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2022 Q2
15 Aug 22
We continue to expect to be within our $4 billion to $8 billion ME&T free cash flow range for the full year 2022
me & t fcf still 4-8
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2022 Q2
15 Aug 22
Although our adjusted operating profit margins improved sequentially in the quarter, they were slightly lower than our expectations, mostly due to lower-than-expected volumes and unfavorable mix
mgns lower
Transcript
2022 Q2
15 Aug 22