Caterpillar beats profit forecasts despite revenue fall

The company reported sales and revenue of $16.7bn, a 4% decrease from the $17.3bn recorded in the same quarter of 2023.

It put the decline largely down to reduced sales volumes, though it was somewhat mitigated by favourable pricing.

Despite the drop in revenue, Caterpillar's adjusted profit per share rose to $5.99, up from $5.55 in the second quarter of 2023, exceeding analysts' expectations of $5.54 per share.

The company's operating profit margin remained strong at 20.9%, with an adjusted operating profit margin of 22.4%, slightly higher than the previous year's 21.3%.

Caterpillar said it generated $3bn in operating cash flow during the quarter, ending with $4.3bn in enterprise cash.

The company deployed $2.5bn in cash for share repurchases and dividends, reflecting its commitment to returning value to shareholders.

“I’d like to thank our team for delivering another strong quarter, including higher adjusted operating profit margin, record adjusted profit per share and robust ME&T free cash flow,” said chairman and chief executive officer Jim Umpleby.

“Our results continue to reflect the benefit of the diversity of our end markets as well as the disciplined execution of our strategy for long-term profitable growth.”

At 0821 EDT (1321 BST), shares in Caterpillar were up 4.1% in premarket trading in New York, at $329.78.

They had closed down 1.27% on Monday, ahead of the results announcement, at $316.80.

Reporting by Josh White for Sharecast.com.