Caterpillar Inc. (CAT)

Caterpillar Inc (CAT) stock dropped by 7.02% due to the company's mixed Q1 report and subdued growth prospects for 2024.

• Q1 Financial Performance Highlights: In the first quarter, Caterpillar reported earnings of $5.60 per share, surpassing Wall Street's consensus estimate of $5.14 per share. However, sales fell short of expectations, totaling $15.8 billion. The company managed to offset lower sales volume through strong pricing strategies and cost management, resulting in an operating profit margin of 22.3%, up from 17.2% in the first quarter of the previous year.
• Forecast for Future Sales and Revenue: Management anticipates second-quarter sales to be lower than the $17.3 billion recorded in the same period last year, with full-year 2024 revenue expected to be "broadly similar" to the $67.1 billion in sales from 2023. While in line with expectations, the lack of growth disappointed investors, especially considering Caterpillar's 13% sales growth in 2023.

Caterpillar, Inc. Stock (CAT) dropped by 6.65% from $242.16 to $226.05 in the trading on Tuesday October 31, 2023. The reason why CAT stock down today include:

• Weak outlook: Caterpillar today posted higher earnings and revenue in the third quarter, driven by higher prices and volumes. However, the construction-equipment maker issued an underwhelming sales outlook for the current fourth quarter. It is due to falling order backlogs which arose from shorter lead times for filling orders and slowing machinery demand.
• Surge in mortgage rates: The surge in mortgage rates could dampen the outlook for residential construction, which makes up one-fourth of Caterpillar's construction business.