Caterpillar missed both earnings and revenue expectations for the third quarter. Lower-than-expected end user demand took a toll on its quarterly performance.
The construction machinery and equipment company reported Q3 adjusted earnings of $2.66 a share, which is well below analysts’ expectation of $2.83 (based on Zacks consensus estimate).
Revenue for the quarter fell -6% year-over-year to $12.8 billion, compared to analysts’ estimate of $13.4 billion (based on Zacks consensus estimate).
Volume faced headwinds as dealers lowered inventory by $400 million in the reported quarter, after having increased inventories by $800 million in the year-ago quarter. End-user demand turned out to be lower than anticipated.
Sales at each of Construction Industries, Resource Industries, Energy & transportation, and Other segments declined by -7%, -12%, -2%, and -2% respectively from the prior year quarter.
For the fourth quarter, Caterpillar is expecting end-user demand to remain flat on global economic uncertainty.
For the full-year 2019, Caterpillar lowered its projection of adjusted earnings per share to a range of to $10.59-$11.09, from the prior guidance of $11.75-$12.75. Including 31 cents per share discrete tax benefit related to U.S. tax reform, the earnings guidance is at $10.90-$11.40. Caterpillar anticipates modesty lower sales in 2019.