Caterpillar's Construction Revenue Down 7% in Second Quarter 2024

Changes in dealer inventory levels were a key factor in Caterpillar’s declining second-quarter revenue, the company says.

Construction Industries revenue came in at $6.7 billion for the second quarter, down 7% from $7.2 billion in last year’s second quarter. The segment saw a lower sales volume of $588 million in the quarter. Caterpillar attributed this to dealer inventories, which remained mostly flat during the second quarter of 2024, compared to an increase during the second quarter of 2023.

Dealer inventories among all the company’s segments were down around $400 million in the second quarter vs. rising $200 million in last year’s second quarter.

In North America, however, construction net sales came in at almost $4 billion, nearly unchanged year-over-year. The only region in which Caterpillar saw construction revenue increase in the second quarter was in Latin America, where revenue rose 20% year-over-year to $677 million.

Retail construction sales in North America were down 3% in the second quarter vs. up 4% in the first quarter of 2024 and up 13% in the fourth quarter of 2023.

Construction profit was $1.7 billion, a decrease of $62 million, or 3%, compared with $1.8 billion in the second quarter of 2023.

Caterpillar’s consolidated sales and revenue for the quarter came in at $16.7 billion, down 4% year-over-year, which CEO James Umpleby said during the earnings call was “slightly below our expectations.”

Speaking during the earnings call, Caterpillar CFO Andrew Bonfield said the company is now assuming lower sales in the second half of 2024, where previous earnings have shown the second half of the year usually brings increased sales vs. the first half. He added the company anticipates service revenue to increase in the second half of the year.