Caterpillar posts a 54% decline in earnings within the third quarter because of decrease demand for tools
Caterpillar Inc. excavators will go on sale Monday, January 27, 2020 at the Whayne Supply Co. dealer in Louisville, Kentucky, USA.
Luke Sharrett | Bloomberg | Getty Images
Industrial machinery maker Caterpillar reported a 54% profit decline in the third quarter on Tuesday as unit 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 for the quarter. Revenue for the third quarter was 23% year-over-year, and earnings per share were down 54% year-over-year.
Still, the Deerfield, Illinois-based company’s results were above Wall Street’s expectations. According to Refinitiv, analysts were expecting adjusted earnings per share of $ 1.18 on sales of $ 9.798 billion.
According to Caterpillar, the decline in sales was mainly due to lower sales volume, which was due to lower consumer demand for equipment and services, as well as the impact of the decline in dealer inventories.
Caterpillar shares fell 2.5% in the pre-market on Tuesday following the results. The stock is up around 10% in 2020.
“Our third quarter results were broadly in line with our expectations and we are encouraged by positive signs in certain industries and regions,” said Jim Umpleby, chairman and CEO, in a statement. “We are implementing our strategy and are ready to react quickly to changing market conditions.”
In the second quarter, Caterpillar earnings declined 70% year over year to $ 1.03 as the coronavirus-triggered recession slowed device demand.
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