(Bloomberg) — Caterpillar Inc. reported first-quarter results that showed machinery sales dipping from a year earlier and warned its second-quarter figures are also expected to be lower.
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The shares were 3.7% lower in premarket trading, even after the company reported adjusted earnings of $5.60 a share, beating the $5.13-a-share average estimate of analysts surveyed by Bloomberg. Sales in its key construction and resource industries divisions fell, and overall revenues continued to show weakness in areas outside North America.
Caterpillar is widely viewed as an economic bellwether, given how demand for its iconic yellow machines that dot mines and construction sites can shed light on the health of those industries around the world.
The company expects second-quarter sales will be lower than a year earlier, while its profit margin is expected to remain steady.
Sales and revenues for the first quarter of 2024 were $15.8 billion, about flat to the first quarter of 2023, due to lower sales volume, which was mostly offset by favorable price realization, the company said.
Caterpillar, one of the world’s biggest producers of heavy machinery, has benefited from robust earnings during the past three years, beating expectations in almost every quarter since 2020, often by posting better-than-anticipated revenues.
The Irving, Texas-based company said in February that this year’s sales would be broadly in line with 2023. Moderating demand in manufacturing in regions including Asia and Europe along with slowing non-residential construction has been a challenge for machinery makers such as Caterpillar, though rising industrial activity in the US and China are showing signs of promise ahead.
Strong earnings from North America — Caterpillar’s most important market — have helped the company offset weakness from other regions, including Europe, Latin America and Asia in previous quarters. That trend continued in the first quarter.
(Updates with details throughout.)
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