09:46 AM EDT, 08/06/2024 (MT Newswires) -- Caterpillar's ( CAT ) second-quarter earnings unexpectedly rose year over year while revenue fell as the construction equipment company lowered its full-year revenue expectations.

The company reported adjusted earnings of $5.99 a share for the June quarter, up from $5.55 the year before, and ahead of the Capital IQ-polled consensus of $5.54. Revenue fell to $16.69 billion from $17.32 billion last year, but was slightly higher than Wall Street's view for $16.67 billion.

"In the second quarter, we achieved higher adjusted operating profit margin, record adjusted profit per share and generated robust (machinery, energy and transportation) free cash flow," Chief Executive Jim Umpleby said during an earnings call, according to a Capital IQ transcript. "Our results continue to reflect the benefit of the diversity of our end markets as well as the disciplined execution of our strategy for long-term profitable growth."

Machinery, energy and transportation revenue fell 4% year over year to $15.84 billion. Within the segment, construction and resource industries declined 7% and 10%, respectively, mainly due to lower sales volumes, partially offset by price realization. Energy and transportation climbed 2% to $7.34 billion, aided by price gains.

Revenue in North America ticked 1% higher, while sales in Europe, Africa and the Middle East fell 15%. Order backlog fell by $2.2 billion year over year, but increased by $700 million from the preceding quarter, according to an investor presentation.

For the ongoing quarter and full year, Caterpillar ( CAT ) expects sales to come in "slightly lower" year over year, according to the presentation. The company was previously expecting 2024 revenue to be "broadly similar" to last-year levels, Umpleby said on the call. The Street is looking for $16.35 billion in revenue for the September quarter and $66.06 billion for 2024.

"This change reflects an updated assumption of a slight reduction in machine dealer inventory, primarily in resource industries and lower-than-expected sales to users in construction Industries mainly due to lower rental fleet loading in North America," Chief Financial Officer Andrew Bonfield told analysts.

For 2024, Caterpillar ( CAT ) expects adjusted profit per share to be higher than its previous expectations, while adjusted operating profit margin is estimated to come in at the top end of its target range.

"Overall, our expectations for full year adjusted operating profit and adjusted profit per share are now higher than it was during our last earnings call," Umpleby said.

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