Caterpillar (NYSE:CAT) reported stronger-than-expected results for the third quarter on Tuesday.
While its shares rose over 3% in response to the Q3 earnings beat, the stock has turned negative after cautious comments during the earnings call.
At 08:00 ET (12:00 GMT), Caterpillar shares were down 5%.
Earnings per share of $5.52 crushed the average analyst estimate of $4.80. Revenue for the quarter came in at $16.8 billion versus the consensus estimate of $16.56B.
The company’s core business – Machinery, Energy & Transportation – reported a 12% increase in Q3 sales, and a 48% rise in operating income.
The company returned $1B to shareholders through dividends and share repurchases in the quarter, it said.
"I'd like to thank our global team for delivering another great quarter, as demonstrated by double-digit top-line growth, strong adjusted operating profit margin and robust ME&T free cash flow," said chairman and CEO Jim Umpleby.
"We remain focused on supporting our customers' success and executing our strategy for long-term profitable growth."
However, a declining backlog, softer orders, and a soft 4Q sales outlook pushed shares lower in pre-open trading. It is likely that investors weren't expecting a lower backlog and slowing orders.
"We see risk of the stock being down today due to weaker bookings and growth in dealer inventories," Goldman Sachs (NYSE:GS) analysts wrote in a note.
According to the analysts, the company's Q4 sales outlook "implies revenue that's $1.2 bn slower than normal seasonality."