Caterpillar Stock In Focus After Lower-Than-Expected Q3: Retail Sentiment Sours

Shares of Caterpillar Inc ($CAT) fell nearly 4% on Wednesday morning after the engineering equipment manufacturer’s third-quarter results fell short of expectations and full-year guidance witnessed a downward revision.

Revenue fell 4% year-over-year (YoY) to $16.1 billion, falling short of an estimate of $16.37 billion. The decline was led by lower sales volume mainly driven by lower sales of equipment to end users. In addition, changes in dealer inventories had an unfavorable impact on sales volume, the firm said.

Adjusted earnings per share (EPS) came in at $5.17 versus an estimate of $5.35. Operating profit fell 9% YoY to $3.147 billion, mainly due to the profit impact of lower sales volume of $372 million.

The Construction Industries segment witnessed a 9% YoY decline in sales to $6.345 billion, primarily led by lower sales volume of $458 million and unfavorable price realization of $147 million.

Resource Industries’ total sales fell 10% YoY to $3.028 billion, primarily due to lower sales volume, driven by lower sales of equipment to end users.

Meanwhile, Energy & Transportation’s total sales rose 5% YoY to $7.187 billion, led by favorable price realization. Caterpillar said the increase in sales was primarily due to favorable price realization of $213 million and higher sales volume of $135 million, including inter-segment sales.

Following the announcement, retail sentiment on Stocktwits dipped into the ‘bearish’ territory (44/100) from ‘bullish’ a day ago, accompanied by ‘high’ retail chatter.

Caterpillar reportedly said it expects annual revenue to be slightly lower than its previous forecast. The firm, however, retained its adjusted operating profit margin and adjusted profit per share expectations for the full year.

Shares of Caterpillar have gained over 32% this year so far.

Also See: Snap Stock Soars Premarket After Upbeat Q3 Earnings: Retail Is Exuberant

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