Caterpillar's stock is falling toward its worst day since 2020 after earnings

By Emily Bary

Order backlog grew relative to the December quarter but was down from a year earlier

Caterpillar Inc. shares were dropping more than 7% in Thursday morning action after the company came up a bit short on first-quarter revenue as sales volumes declined.

The company reported profit of $2.86 billion, or $5.75 a share, compared with net income of $1.94 billion, or $3.74 a share, in the year-before period. On an adjusted basis, Caterpillar (CAT) posted profit of $5.60 a share, up from $4.91 a share a year before, while the FactSet consensus was for $5.14 a share.

Revenue came in at $15.80 billion versus $15.86 billion a year earlier. Analysts were modeling $16.00 billion.

The company's sales performance was impacted by lower volume, though it was able to mostly offset that through "favorable price realization."

"Pricing continues to normalize but remains solidly positive," Jefferies analyst Stephen Volkmann wrote.

The company anticipates lower growth in the second quarter relative to what was seen in the same period a year prior. Caterpillar expects dealer inventories of machines to drop in the period, which it said is in line with normal seasonality. The company also expects it will see favorable year-over-year price realization in this quarter.

Shares are down 7.1% in morning action Thursday. That puts them on pace for their worst single-day percentage decline since they lost 7.4% on Nov. 4, 2020.

Order backlog increased by about $400 million relative to the December quarter, though it was down $2.5 billion from the prior-year March quarter.

The company saw construction industries total sales fall 5% to $6.42 billion, a decline fueled by lower sales of equipment.

Resource Industries sales dropped 7% to $3.19 billion, also driven by lower equipment sales. Caterpillar recognized a 7% boost in energy and transportation sales, as volumes increased. Price benefits helped that unit as well.

Financial products revenue grew 10% to $991 million.

Caterpillar said to expect full-year revenue to be "broadly similar" to what was seen in 2023, when the company posted $67.1 billion in revenue.

-Emily Bary

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04-25-24 1039ET

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