Caterpillar stock plunged to a nine-month low early Thursday following the release of its third-quarter financial results, as a narrow revenue miss overshadowed an earnings beat and a growing order backlog, according to data published by Investor’s Business Daily. The heavy industrial equipment manufacturer saw its shares tumble 9.3% to $646.50 in early trading, marking their lowest level since January 29 and leaving the stock 33.5% off its 52-week high reached previously.
The decline in CAT shares exerted significant downward pressure on the price-weighted Dow Jones Industrial Average. According to Investor’s Business Daily, a 64-point loss by Caterpillar, combined with weakness in Google-parent Alphabet, cancelled out broader market gains led by Amgen during the session. While the company’s financial metrics reflected strong overall demand in several key sectors, investors reacted cautiously to the slight top-line miss and the outlook for fourth-quarter growth.
Financial Performance and Earnings Breakdown
For the third quarter, Caterpillar reported adjusted earnings per share of $7.20, representing a 45% increase compared to the same period a year earlier and beating Wall Street consensus estimates by 14 cents. This total included a 21-cent per share gain stemming from tariff refunds secured via a United States Supreme Court ruling. Total revenue grew 17% year-over-year to $20.682 billion, though this figure fell $73.5 million short of the FactSet consensus forecast. Furthermore, the rate of sales growth decelerated compared to the 24% expansion recorded in the second quarter.
Despite the revenue shortfall, Caterpillar’s order backlog expanded significantly, rising by $6 billion from the previous quarter to reach $78.1 billion. Segment performance showed continued momentum in key areas, though growth rates moderated. Power & Energy segment sales increased 18% to $8.8 billion, bolstered by demand for reciprocating generators utilized in data centers. Construction segment sales also grew 18% to $8 billion, slowing markedly from the 35% growth rate seen in Q2. Meanwhile, Resource Industries sales rose 15% to $4.6 billion, decelerating from a 20% growth rate in the prior quarter.
Full-Year Outlook and Market Implications
Looking ahead, Caterpillar leadership maintained its full-year guidance, projecting “mid-to-high teens” revenue growth. Operating margins are still anticipated to land near the bottom of the company’s established target range, factoring in an estimated $2.2 billion in tariff expenses but excluding the impact of tariff refunds. For the fourth quarter, the manufacturer expects moderate sales growth relative to the same period last year, a projection that fell short of analyst forecasts predicting 12% growth.
CEO Joe Creed emphasized the resilience of the company’s operational footprint despite the macroeconomic and policy headwinds. “Our third-quarter results reflect the durability of our end markets, with strong order rates and a record backlog,” Joe Creed stated in the official earnings release covered by Investor’s Business Daily. Nonetheless, the combination of decelerating segment sales growth and a cautious near-term outlook triggered a sharp repricing of the industrial giant’s shares on equity markets.