Why Caterpillar Shares Are Trading Lower Today

Caterpillar Inc CAT reported first-quarter FY22 sales and revenue growth of 14.3% year-over-year to $13.59 billion, beating the consensus of $13.40 billion.
Revenue growth was driven by higher sales volume and favorable price realization, partially offset by unfavorable currency impacts.
Segment Revenue: Construction Industries $6.12 billion (+12% Y/Y), Resource Industries $2.83 billion (+30% Y/Y), and Energy & Transportation $5.04 billion (+12% Y/Y).
Financial Products segment revenue increased by 3% Y/Y to $783 million.
Adjusted EPS was $2.88, beating the consensus of $2.60.
Dealers increased inventories by $1.3 billion during the quarter, compared with an increase of $700 million in 1Q21.
Operating profit increased by 2.3% Y/Y to $1.86 billion, and the margin contracted by 160 bps to 13.7%.
Caterpillar generated an operating cash flow of $313 million in Q1, compared to $1.93 billion a year ago. It ended the quarter with $6.53 billion of cash and equivalents.
The company returned $1.4 billion to shareholders through share repurchases and dividends in the quarter.
Outlook: Caterpillar expects 2Q22 sales to increase sequentially, reflecting continued strong end-user demand and pricing. The company expects the 2Q22 adjusted operating profit margin to be similar to 2Q21.
CAT expects margin improvement in 2H compared to 1H.
Price Action: CAT shares are trading lower by 5.20% at $203.00 on the last check Thursday.
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