Caterpillar reports 54% drop in earnings amid lower equipment demand
Caterpillar Inc. excavators are displayed for sale at the Whayne Supply Co. dealership in Louisville, Kentucky, U.S., on Monday, Jan. 27, 2020.
Luke Sharrett | Bloomberg | Getty Images
Industrial machinery manufacturer Caterpillar on Tuesday reported a 54% drop in earnings in the third quarter as equipment sales declined across all regions and segments.
The Dow component posted better-than-expected adjusted earnings per share of $1.34 on revenue of $9.9 billion in the quarter. Its third-quarter sales marked a 23% decline year over year and profit per share dropped 54% compared to the same quarter a year ago.
Still, the Deerfield, Illinois-based company’s results came in above Wall Street’s expectations. Analysts were expecting adjusted earnings per share of $1.18 on revenue of $9.798 billion, according to Refinitiv.
Caterpillar said the sales decline was primarily due to lower sales volume driven by lower end-user demand for equipment and services and the impact from decreases in dealer inventories.
Shares of Caterpillar slipped 2.5% in Tuesday’s premarket following the results. The stock is up about 10% in 2020.
“Our third-quarter results largely aligned with our expectations, and we’re encouraged by positive signs in certain industries and geographies,” Chairman and CEO Jim Umpleby said in a statement. “We’re executing our strategy and are ready to respond quickly to changing market conditions.”
In the second quarter, Caterpillar’s profit dropped 70% year over year to $1.03 as the coronavirus-triggered recession slashed demand for equipment.
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