Caterpillar Inc. (NYSE:CAT) shares fell 3.9% despite reporting improved revenue and earnings in the third quarter, as it forecast a drop in margins in the fourth quarter.
The Irving, Texas-based construction, mining and engineering giant said in the quarter ended September 30, revenue totalled $16.81 billion, a 12% increase compared with $14.99 billion a year ago.
The increase was primarily due to favourable price realization and higher sales volume, the firm added.
Operating profit margin climbed to 20.5% from 16.2% last year, while adjusted EPS jumped to $5.52 from $3.95 reflecting the higher sales partially offset by higher selling, general and administrative and research and development expenses, and higher manufacturing costs.
But while Caterpillar expects slightly higher fourth-quarter 2023 sales and revenues compared to the year before, its adjusted operating profit margin is expected to fall from the third quarter.
The increase in sales was driven by higher sales of equipment to end users, partially offset by the impact from changes in dealer inventories and lower services sales volume.
Construction sales rose 12%, Resource Industries increased 9% and Energy & Transportation sales improved by 11%.
Pre-tax profit rose to $3.52 billion from $2.56 billion before.