Why Construction Equipment Maker Caterpillar's Stock Is Sliding Today

Leading construction and mining equipment manufacturer Caterpillar Inc CAT reported a third-quarter FY23 revenue increase of 12% year-over-year to $16.81 billion, beating the consensus of $16.59 billion. 

CAT's adjusted earnings of $5.52 per share, compared to $3.95 a year ago, topped the consensus of $4.79.

The sales increase was due to favorable price realization and higher sales volume that was driven by higher sales of equipment to end users.

Adjusted operating profit margin was 20.8% for 3Q23, versus 16.5% in 3Q22.

Machinery, Energy & Transportation segment revenue increased 12% Y/Y, with Construction Industries +12%, Resource Industries +9%, Energy & Transportation +11%, and Other Segments +3%.

Financial Products revenues increased by 15% Y/Y to $716 million.

For the nine months ended September 30, 2023, CAT's operating cash flow was $8.88 billion versus $5.03 billion a year ago. The company ended the quarter with $6.5 billion of enterprise cash.

Related: Caterpillar Likely To Report Higher Q3 Earnings; Here's A Look At Recent Price Target Changes By The Most Accurate Analysts

During the quarter, the company paid dividends of $0.7 billion and repurchased $0.4 billion of its common stock.

4Q23 Outlook: CAT expects slightly higher sales and revenues vs 4Q22; Adjusted operating profit margin to be lower than 3Q23.

For FY23, the company expects adjusted operating profit margin to be slightly above the targeted range relative to the corresponding expected level of sales.

CAT expects full-year ME&T's free cash flow to exceed $4 billion to $8 billion range.

Price Action: CAT shares are trading lower by 5.81% at $228.10 on the last check Tuesday.