The earnings, however, handily beat Wall Street estimates.
The Deerfield, Ill.-based company said it earned $1.03 an adjusted share, vs. $2.83 an adjusted share in the same period a year ago. Analysts polled by FactSet had been expecting per-share earnings of 64 cents.
Sales came in at $10 billion, above the $9.3 billion expected by the average of analysts polled by FactSet but still below last year’s $14.4 billion.
Operating profit, however, was $784 million, a drop of $1.429 billion, or 65%, compared with $2.213 billion in the second quarter of 2019, the company said – thanks to “lower sales volume and unfavorable price realization.”
Machinery, energy and transportation-related revenue, the bulk of the company’s sales, was $9.31 billion, driven lower by both lower end-user demand and “changes among dealer inventories,” specifically a drop in stocking of new equipment on dealers’ lots.
Dealers’ inventories decreased by roughly $1.4 billion during the quarter, Caterpillar said.
Construction equipment sales were $4 billion, down 37% from a year ago, while resource industry related equipment sales were $1.83 billion, down 35%. Sales of energy and transportation equipment were $4.15 billion, down 24%.
Caterpillar ended the second quarter with $8.8 billion of enterprise cash and $18.5 billion of available liquidity sources. In July, Cat Financial issued $1.5 billion of new three-year and 18-month medium-term notes to supplement its liquidity position.
Shares of Caterpillar were down 2.98% at $132.66 in trading on Friday.