Wrapping up Q3 earnings, we look at the numbers and key takeaways for the construction machinery stocks, 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 Q3. As a group, revenues were in line with analysts’ consensus estimates.
In light of this news, share prices of the companies have held steady as they are up 4.3% on average 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 $16.11 billion, down 4.2% year on year. This print was in line with analysts’ expectations, but overall, it was a softer quarter for the company with a miss of analysts’ EBITDA estimates.
"I'd like to thank our global team for delivering strong adjusted operating profit margin and adjusted profit per share while generating robust ME&T free cash flow," said Chairman and CEO Jim Umpleby.
The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $387.99.
Is now the time to buy Caterpillar? Access our full analysis of the earnings results here, it’s free.
Best Q3: 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 $1.21 billion, down 6.1% year on year, outperforming analysts’ expectations by 4.2%. The business had an exceptional quarter with an impressive beat of analysts’ organic revenue and operating margin estimates.
Terex achieved the biggest analyst estimates beat among its peers. However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $53.87.
Is now the time to buy Terex? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: Manitowoc (NYSE: MTW)
Contracted by the United States Navy during WWII, Manitowoc (NYSE: MTW) provides cranes and lifting equipment.
Manitowoc reported revenues of $524.8 million, flat year on year, exceeding analysts’ expectations by 1.6%. Still, it was a disappointing quarter as it posted a miss of analysts’ EBITDA estimates.
Interestingly, the stock is up 3.6% since the results and currently trades at $10.75.
Read our full analysis of Manitowoc’s results here.
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 $291.4 million, down 3.9% year on year. This number came in 6.9% below analysts' expectations. All in all, it was a slower quarter for the company.
Astec had the weakest performance against analyst estimates among its peers. The stock is up 14.2% since reporting and currently trades at $38.07.
Read our full, actionable report on Astec here, it’s free.
Market Update
As expected, the Federal Reserve cut its policy rate by 25bps (a quarter of a percent) in November 2024 after Donald Trump triumphed in the US Presidential election. This marks the central bank's second easing of monetary policy after a large 50bps rate cut two months earlier. Going forward, the markets will debate whether these rate cuts (and more potential ones in 2025) are perfect timing to support the economy or a bit too late for a macro that has already cooled too much. Adding to the degree of difficulty is a new Republican administration that could make large changes to corporate taxes and prior efforts such as the Inflation Reduction Act.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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