Caterpillar Reports Sales Doldrums Ahead of Earnings
Caterpillar has released its monthly retail sales report, just one day ahead of the company’s scheduled second-quarter earnings report.
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Wednesday morning, Caterpillar Inc. (NYSE: CAT) released its monthly retail sales report before markets opened. Coming just one day ahead of the company’s scheduled earnings report, the company reported that total sales were down by 2% to 50% in all sales regions.
Caterpillar reports sales on a three-month rolling scale. The latest report includes data for April, May and June of this year.
Sales in Latin America have been hit hardest, down 50% overall and down 38% in sales of machines to resource industries, mainly mining, and down 55% in sales to construction industries.
Overall sales in the company’s Asia/Pacific region are down 19% in June, with mining equipment sales down 14% and construction equipment sales down 22%.
In North America, total sales are down 5%. Sales to resource industries are down 7% and sales to the construction industry are down 8%.
Only the Europe, Asia, Middle East (EAME) region showed any sign of life, with mining equipment sales up 1%. Construction equipment sales fell 2%, however, and total sales were down 2%.
In the energy and transportation segment, sales of transportation products were down 36%, power generation sales fell 2%, oil and gas equipment sales dropped 4% and industrial sales were down 12%. Overall sales were down 10%.
The collapse in commodity metal prices has stalled demand for more machinery and the slow-growth economy, particularly in emerging economies, likely has tamped down sales of construction equipment.
When Caterpillar reports quarterly results Thursday morning, analysts expect earnings per share of $1.27 on revenues of $12.62 billion. In the second quarter of last year, the company posted earnings per share of $1.69 on sales of $14.15 billion.
This report has weighed down Caterpillar’s shares, which traded down about 2.6% at $80.07 in the first half hour Wednesday morning. The stock’s 52-week range is $78.19 to $111.28, and the analysts’ consensus price target is $85.90.
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
