Caterpillar misses by $0.24, misses on revs; guides FY19 EPS below consensus, revs below consensus (133.69)
- Reports Q3 (Sep) earnings of $2.66 per share, $0.24 worse than the S&P Capital IQ Consensus of $2.90; revenues fell 5.6% year/year to $12.76 bln vs the $13.49 bln S&P Capital IQ Consensus. The primary driver of the decline in sales and revenues was a $1.2 billion movement in dealers' inventories. Dealers decreased their inventories about $400 million during the third quarter of 2019, after increasing their inventories about $800 million during the third quarter of 2018. "Our volumes declined as dealers reduced their inventories, and end-user demand, while positive, was lower than our expectations."
- Co issues downside guidance for FY19, lowers EPS to $10.90-11.40 from the low end of $12.06-13.06 vs. $11.65 S&P Capital IQ Consensus; sees FY19 revs modestly lower from $54.7 bln vs. $55.72 bln S&P Capital IQ Consensus.
- "In the fourth quarter, we now expect end-user demand to be flat and dealers to make further inventory reductions due to global economic uncertainty," said Umpleby. "Caterpillar's improved lead times, along with these dealer inventory reductions, will enable us to respond quickly to positive or negative developments in the global economy in 2020. We are expanding our offerings and investing in services, including digital capabilities, to drive long-term profitable growth, while continuing to achieve our Investor Day targets for improved financial performance.