Caterpillar’s sales fell 23% in the third quarter as the pandemic throttled demand for construction equipment and a trade war with China continues to create headwinds.
The company still managed to top Wall Street expectations, despite rising COVID-19 infections that hamper almost all sectors, including construction.
Revenue declined to $9.88 billion from $12.76 billion a year earlier as dealers decreased inventories in all regions during the quarter, except for the Asia/Pacific region.
Still, Caterpillar managed to beat the $9.67 billion analysts polled by Zacks Investment Research forecast.
For the three months ended Sept. 30, Caterpillar Inc. earned $668 million, or $1.22 per share, down more than 50% from the same period last year. Stripping out one-time costs, earnings were $1.34 per share, easily beating the $1.15 per that Wall Street was looking for.
Yet the company has yet to issue guidance to investors, and shares dropped almost 2% before the opening bell Tuesday.
The construction industry has been constrained by the unchecked spread of COVID-19 in the U.S., which is now setting record highs. With the upward trajectory, especially in the Midwest and Plains, home building and commercial projects planned for the winter are under increasing threat.
Sales of new homes fell by 3.5% in September, the Commerce Department reported this week. While new home sales are up 32.1% after a strong summer when many states managed outbreaks, the latest report could signal trouble in the months ahead.