Earnings Results: Caterpillar earnings disappoint again: Supply chain challenges, China and strong dollar blamed as sales came up short

by | Aug 2, 2022 | Stock Market

Shares of Caterpillar Inc. sank Tuesday, after the construction and mining equipment maker reported another disappointing earnings report, with profit beating expectations but sales coming up a bit shy. The company
stressed that demand remained “healthy” and “strong,” but results were hampered mostly by continued supply chain constraints, as well as the strong U.S. dollar and weakness in China due to COVID-related restrictions.

Management actually said supply chain “challenges,” “constraints,” “disruptions” or “pressures” 19 times during the prepared-remarks part of the post-earnings conference call with analysts, according to a FactSet transcript, as they described any drags on results. “Overall demand remains healthy across our segments,” said Chief Executive Jim Umpleby on the call. “However, the environment remains challenging primarily due to continuing supply chain disruptions.” The stock dropped 3.3% in midday trading, to pace the Dow Jones Industrial Average’s
decliners on the day. The stock’s $6.48 price decline would shave about 43 points off the Dow’s price, while the Dow was down 48 points, or 0.2%. The shares were headed for the third-straight decline on the day after quarterly earnings were reported, and the eighth decline in the past nine quarters. After the past 18 earnings reports, the stock has fallen 15 times. Caterpillar reported before Tuesday’s open net income for the quarter to June 30 that rose to $1.67 billion, or $3.13 a share, from $1.41 billion, or $2.56 a share, in the same period a year ago. Excluding nonrecurring items, adjusted earnings per share increased to $3.18 from …

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