In the video above, Caterpillar CFO Andrew Bonfield discusses third-quarter 2024 financial results.
Caterpillar sales declined 4% in the third quarter to $16.1 billion compared to $16.8 billion in Q3 2023. Sales in North America were down 11% to $8.5 billion, and construction segment sales dropped 9% to $6.3 billion in the quarter compared to the same period the previous year.
Jim Umpleby, chairman/CEO, said the lower-than-expected sales volume affected sales in the North American construction segment. He said that although the company expects lower sales in the fourth quarter, the company remains positive about long-term demand.
Cat expects to reap benefits in Infrastructure spending
Caterpillar expects to reap benefits from infrastructure spending, noting that there is “a lot of infrastructure activity out there,” according to Umpleby. “That’s quite healthy.” He cited figures from the American Road & Transportation Building Association that said only 27% of funding in the Infrastructure Investment and Jobs Act (IIJA) has actually been spent.
Caterpillar also said ongoing softness in sales into dealer rental fleets dragged down sales. This and “unfavorable price realization” would keep Q4 sales lower than expected. The company said although the pricing environment is “normalizing,” accounting procedures in which dealer discounting accrues ahead of the offsets earned through merchandising plans would affect sales in the short term. Andrew Bonfield, CFO, said these accounting effects could stretch over the “next several quarters.”
In terms of profit, adjusted operating profit in the third quarter was down 8% to $3.2 billion. Operating project margin dropped from 20.5% in Q3 2023 to 19.5%.
