Caterpillar Rises as Profits Beat Estimates Despite Lower Sales

Caterpillar (CAT) shares are rising in premarket trading Tuesday as the construction vehicle maker’s second-quarter profits beat analysts’ estimates, offsetting another quarter of revenue falling short of expectations.

Revenue slipped 3.6% year-over-year to $16.69 billion, coming in short of analysts’ estimates compiled by Visible Alpha. Profits fell 8.2% to $2.68 billion, narrowly beating projections, but adjusted net income, accounting for roughly $250 million in one-time expenses like restructuring costs, beat estimates by a wider margin and rose from last year to $2.93 billion.

Construction, Resource Industries Sales Slip

Similar to the company’s first-quarter report, sales in Caterpillar’s Construction Industries and Resource Industries divisions slipped, while Energy & Transportation segment sales rose slightly. The decline in sales volume due to lower dealer inventory was partially offset by higher prices, Caterpillar said.

“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 [Machinery, Energy & Transportation] free cash flow,” Caterpillar Chief Executive Officer (CEO) Jim Umpleby said. “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.”

Caterpillar shares were up 3.7% to $328.50 about 90 minutes before the opening bell Tuesday. They have gained about 11% since the start of 2024.