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Director James Fish Jr. bought about $620,000 worth of shares on Monday. This was an open-market purchase, meaning he used his own cash to buy stock at current prices rather than just receiving shares as part of his pay.
While this is not a massive amount for a company of this size, it is notable because it happened just days after the stock fell following earnings. When a board member puts their own money into the stock after a sell-off, it often suggests they believe the business remains healthy and the market has overreacted to short-term news.
Home building activity slowed as the cost of materials and labor continued to climb. This matters for Caterpillar because its construction division relies on steady demand for excavators and loaders used in residential projects.
While the company has seen strong growth in engines for data centers, a slowdown in housing could act as a drag on its traditional machinery business. We are watching to see if higher interest rates and building costs start to eat into the company's large order backlog.
Source: WSJ
After Caterpillar reported its October results, we updated our revenue and profit projections for the coming year. We have added the difference between dealer inventory levels and actual sales to end-users to what we track. We also added a $128 million one-time refund of government tariffs to our assessment of underlying operating profit. We have started tracking the 30% growth in the power generation business as a primary indicator of demand from data center builders.
Caterpillar reported adjusted profit of $7.20 per share, which was slightly ahead of what analysts expected. Sales grew 17 percent to about $20.7 billion, though that number landed just shy of the average estimate. The stock fell about 8 percent following the report, likely because investors were looking for even higher growth given the company's recent run.
The real strength remains in the company's backlog, which is the total value of orders it has signed but not yet delivered. That backlog hit a new record this quarter, providing a clear view of future revenue even if the broader economy slows down. Between dividends and buying back its own shares, the company also returned $2 billion to its owners during the quarter.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
New orders for US-made capital goods, which are a key measure of business spending on equipment, rose in September. Shipments of these products also picked up speed, indicating that industrial demand remained steady through the third quarter.
This is a helpful sign for Caterpillar because it suggests that US companies are still willing to invest in the heavy machinery and engines the company sells. While Caterpillar is a global business, strong domestic spending on equipment helps support its construction and power systems divisions even as other parts of the world face slower growth.
Source: Reuters
Management has cleared its own profit targets for five straight quarters, showing they have a firm grip on costs even as the broader economy shifts.
| Expectation | |
|---|---|
| EPS | $6.64 |
| Revenue | $20.83B |
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