Q2 Report on Tap
The company is preparing to report June quarter results on Tuesday, August 6, at 6:30 am ET. On a per-share basis, adjusted net income is expected to drop by a cent to $5.54 in Q2 from $5.55 a year earlier. On average, Analysts forecast a 3.7% drop in revenues to $16.68 billion. In the first quarter, the top line fell short of expectations while earnings surpassed the Street view, marking the fifth consecutive beat.
The company’s top line has been under pressure lately due to lower volumes, especially in Europe, the Middle East & Africa, and Asia-Pacific. The slowdown has often offset the benefits of higher prices. Meanwhile, the management expects full-year revenue to be almost in line with the ‘record 2023 level,’ but warns of a dip in order rates due to cautious customer spending.
From Caterpillar’s Q1 2024 earnings call:
“In North America, after a very strong 2023, we continue to expect demand in the region will remain healthy in 2024 for both non-residential and residential construction. We anticipate non-residential construction to remain at similar levels to slightly higher demand levels compared to last year due to construction projects, as well as government-related infrastructure. Residential construction demand is expected to be flat to slightly down versus last year, which remains strong in comparison to historical levels.”
Mixed Q1
In the first three months of FY24, Caterpillar’s sales and revenues remained broadly unchanged at $15.8 billion. Revenue growth in the Energy & Transportation and Financial Products segments was offset by weakness in the other segments. Earnings, adjusted for special items, advanced to a record high of $5.60 per share in Q1 from $4.91 per share in the prior-year period, reflecting strong price realization. Unadjusted profit was $5.75 per share, up 54% year-over-year.
Caterpillar’s stock plunged after opening flat on Thursday and maintained the downtrend throughout the session, even as the broad market suffered a selloff due to economic worries.