Looking back on construction machinery stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including Caterpillar (NYSE: CAT) and its peers.
Automation that increases efficiencies and connected equipment that collects analyzable data have been trending, creating new sales opportunities for construction machinery companies. On the other hand, construction machinery companies are at the whim of economic cycles. Interest rates, for example, can greatly impact the commercial and residential construction that drives demand for these companies’ offerings.
The 4 construction machinery stocks we track reported a slower Q2. As a group, revenues missed analysts’ consensus estimates by 1.3%.
While some construction machinery stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.8% since the latest earnings results.
Caterpillar (NYSE: CAT)
With its iconic yellow machinery working on construction sites, Caterpillar (NYSE: CAT) manufactures construction equipment like bulldozers, excavators, and parts and maintenance services.
Caterpillar reported revenues of $16.69 billion, down 3.6% year on year. This print was in line with analysts’ expectations, and overall, it was a satisfactory quarter for the company with an impressive beat of analysts’ operating margin estimates but a miss of analysts’ organic revenue estimates.
"I'd like to thank our team for delivering another strong quarter, including higher adjusted operating profit margin, record adjusted profit per share and robust ME&T free cash flow," said Chairman and CEO Jim Umpleby.
Interestingly, the stock is up 21.8% since reporting and currently trades at $385.90.
Is now the time to buy Caterpillar? Access our full analysis of the earnings results here, it’s free.
Best Q2: Astec (NASDAQ: ASTE)
Inventing the first ever double-barrel hot-mix asphalt plant, Astec (NASDAQ: ASTE) provides machines and equipment for building roads, processing raw materials, and producing concrete.
Astec reported revenues of $345.5 million, down 1.3% year on year, outperforming analysts’ expectations by 4%. The business had a satisfactory quarter with a decent beat of analysts’ EBITDA estimates but a miss of analysts’ earnings estimates.
Astec delivered the biggest analyst estimates beat and fastest revenue growth among its peers. However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $31.05.
Is now the time to buy Astec? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Manitowoc (NYSE: MTW)
Contracted by the United States Navy during WWII, Manitowoc (NYSE: MTW) provides cranes and lifting equipment.
Manitowoc reported revenues of $562.1 million, down 6.8% year on year, falling short of analysts’ expectations by 6%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations.
Manitowoc delivered the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update in the group. As expected, the stock is down 10.5% since the results and currently trades at $9.64.
Read our full analysis of Manitowoc’s results here.
Terex (NYSE: TEX)
With humble beginnings as a dump truck company, Terex (NYSE: TEX) today manufactures lifting and material handling equipment designed to move and hoist heavy goods and materials.
Terex reported revenues of $1.38 billion, down 1.5% year on year. This print lagged analysts' expectations by 3.2%. Taking a step back, it was a mixed quarter with full-year revenue guidance missing analysts’ expectations.
Terex achieved the highest full-year guidance raise among its peers. The stock is down 17.5% since reporting and currently trades at $54.18.
Read our full, actionable report on Terex here, it’s free.
Market Update
The Fed cut its policy rate by 50bps (half a percent) in September 2024, the first in roughly four years. This marks the end of its most pointed inflation-busting campaign since the 1980s. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be assessing whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.
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