Caterpillar (CAT) reported mixed first-quarter results versus a year ago impacted by lower sales volume, while the heavy equipment manufacturer expects revenue to be down on an annual basis in the current three-month period.
The company reported adjusted earnings of $5.60 a share for the March quarter, up from $4.91 the year before, and ahead of the Capital IQ-polled consensus of $5.13. Revenue edged down to $15.8 billion from $15.86 billion, below the Street’s view for $15.99 billion. The stock declined 8.5% in Thursday trading.
“Sales remained about flat compared to the prior year as lower volume was largely offset by favorable price realization,” Chief Financial Officer Andrew Bonfield said during an earnings call, according to a Capital IQ transcript. “The decline in volume was primarily due to lower sales to users,” led by weakness in Europe for construction industries.
Machinery, energy and transportation revenue dipped 1% to $14.96 billion. Construction industries and resource industries logged revenue declines of 5% and 7%, respectively, weighed down by lower sales volume. Energy and transportation climbed 7% to $6.68 billion, mainly due to higher sales volume and price gains.
Revenue in North America advanced 8%, while sales in Europe, Africa and the Middle East slumped 17%. Order backlog decreased by $2.5 billion year-on-year, but increased by $400 million from the preceding quarter, according to an investor presentation.
For the ongoing quarter, Caterpillar expects to record lower sales on a yearly basis, it said in the presentation. The Street is looking for $17.13 billion in revenue. Price realization is anticipated to be favorable versus last year, while dealer inventories of machines are set to decline in line with seasonal trends.
“We anticipate a continuation of healthy demand across most of our end markets for our products and services and price is expected to remain positive year-over-year,” Bonfield said on the call. “Following the typical season of the pattern, we do expect higher sales in the second quarter as compared to the first.”
The company continues to forecast full-year 2024 sales to be “broadly similar” to the previous year, according to the presentation, while the current estimate among analysts on Capital IQ is for $67.29 billion.