Blaming lower end-user demand for equipment and services, Caterpillar reported 3Q sales and revenues decreased by 23% compared to the same period last year. Sales and revenues decreased from $12.8 billion in 2019 to $9.9 billion in 3Q 2020.
Cat also cited a dealer decrease in inventories as a reason for the double-digit decrease.
The company saw profit before taxes fall 48% in the third quarter to $96 million. Profit per share meanwhile fell 54% to $1.22. Despite the heavy losses, the heavy equipment maker managed to exceed Wall Street analyst expectations for the quarter when it comes to adjusted earnings per share, according to a report from CNBC. Cat delivered $1.34 adjusted per share while analysts expected $1.18 on revenue of $9.8 billion.
In Cat’s Construction Industries segment, North American sales and revenues for the quarter were 35% less than Q3 2019. Only Latin America reported a larger decline in the quarter: 44% year-over-year.
“I’m proud of our global team’s performance as we continue to safely navigate the pandemic while remaining firmly committed to serving our customers,” said Caterpillar Chairman and CEO Jim Umpleby. “Our third-quarter results largely aligned with our expectations, and we’re encouraged by positive signs in certain industries and geographies. We’re executing our strategy and are ready to respond quickly to changing market conditions.”
Dealers decreased inventories in all regions during the quarter except for Asia/Pacific. There, dealers increased inventories they responded to a 14% sales and revenues increase for the quarter. In North America, sales decreased mostly due to lower sales volume driven by lower end-user demand, primarily in pipeline and road construction markets, Cat says.
Cat used its Q3 report to highlight its dealers’ response to the pandemic, speaking with Jeff Whiteman, dealer principal with Empire Cat. Whiteman says Empire has “dramatically increased” its use of parts drops and picked up maintenance work as clients have cut repair personnel.
Whiteman also relayed the ingenuity shown by one demo operator delivering a 420 backhoe. When the operator found his entrance into a jobsite blocked by the company’s COVID-19 protocols, he found another way to deliver a promised machine walk around.
He “grabbed his phone, hit record and walked around the machine filming himself doing his typical walk around covering all the maintenance items, safety points and how to use the machine as effectively and efficiently as possible,” says Whiteman. “He emailed it to our client and they loved it. Not only did it meet the needs of the day, it gave them a resource they can rely on for new operators or anyone who needs a refresher.”