Caterpillar's Construction Equipment Sales & Profit Drop
Construction segment profit fell 20% year-over-year, while total construction equipment sales dropped 9%.
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Caterpillar reported total construction equipment sales dropped 9%, with an 11% decline in North America, in its third-quarter financials.
A large factor was a $458 million year-over-year decline in global construction sales volume. Caterpillar’s construction industries operating profit was down 20% year-over-year to $1.5 billion.
North American construction industries sales came in at $3.6 billion vs. $4.1 billion in last year’s third quarter.
Total sales and revenues among all Cat’s segments were $16.1 billion, a year-over-year decrease of $704 million, or 4%, primarily due to lower overall sales volume of $759 million. Cat said this was driven by lower sales to customers and changes in dealer inventories, which less in this year’s third quarter than it had in the third quarter of 2023.
Speaking during the earnings call, Caterpillar Chairman and Chief Executive Officer Jim Umpleby said, “In total, dealer inventory increased by $400 million vs. the second quarter of 2024. For machines, dealer inventory increased by $100 million, slightly more than we had anticipated. Looking ahead to the fourth quarter, our current planning assumptions forecast a reduction in machine dealer inventory. And we expect machine dealer inventory to end the year around the same level as year-end 2023.”
Umpleby also said that for the company’s construction business, he expects lower sales volumes in the fourth quarter but remains positive on the longer-term demand outlook.
Looking ahead, Caterpillar expects fourth-quarter machine sales to customers to be down year-over-year, and year-end machine dealer inventory to be relatively the same compared to last year.
