Caterpillar 2Q earnings miss expectations

Caterpillar (CAT) reported an unexpected decline in quarterly adjusted earnings per share over last year, sending the stock lower in pre-market trading.

Here were the key numbers from the report, with estimates based on Bloomberg-compiled data:

  • Revenue: $14.43 billion, vs. $14.42 billion expected

  • Adj. earnings per share: $2.83, vs. $3.12 expected and $2.97 Y/Y

Caterpillar also reiterated its guidance to see full-year adjusted earnings between $12.06 to $13.06 a share, but now said it expects these will come in at the lower end of the range.

Shares of Caterpillar fell 3% to $134.00 each as of 7:32 a.m. ET.

Over the past several quarters, the manufacturing bellwether has struggled to consistently meet expectations amid slowing global growth, which has weighed on industrial production and demand for Caterpillar’s equipment.

A man poses in a wheel of a Caterpillar excavator at the 'Bauma' Trade Fair for Construction Machinery, Building Material Machines, Mining Machines. REUTERS/Michaela Rehle

While the company delivered stronger-than-expected results in April, CFO Andrew Bonfield warned at the time that the company would lose market share in China in construction activity, with “competitive pricing” from other firms impacting Caterpillar’s results.

Caterpillar reiterated this point in its second-quarter release, calling attention to “continued competitive pricing pressures and timing of the selling season as well as unfavorable currency impacts.” Caterpillar’s construction sales in the Asia/Pacific region declined in the quarter “due to lower demand mainly in China,” the company said in a statement.

Caterpillar’s results have also been closely monitored in light of ongoing trade tensions with China, which have raised the specter of tariff-related costs for materials. Caterpillar’s second-quarter report captures the period in May during which President Donald Trump raised the rate of tariffs on $200 billion worth of Chinese goods to 25%, from 10% previously.

But Caterpillar’s results also reflected softness at home, particularly in the company’s Energy & Transportation business unit, where profit fell 12% and margins contracted over last year. Oil and gas activity was the laggard in the unit, with sales falling 11%. Caterpillar said the year-over-year sales decrease in North America was due to the timing of turbine project deliveries in the second-quarter of 2018, and lower demand for new equipment in the Permian Basin, a major U.S. oil field. Caterpillar also said its guidance for modest sales growth in 2019 “assumes a recovery in Oil and Gas near the end of the year.”

Meanwhile, Caterpillar’s Resource Industries segment – which houses its mining equipment sales – remained a strong unit, albeit one that comprises a smaller percentage of total company sales and profit. Operating profit in the segment climbed 17% over last year while sales grew 11%, which the company attributed to higher demand and capital spending from mining customers.

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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