Caterpillar (CAT) shares fell more than 5% Tuesday morning despite an earnings beat, as the construction equipment maker issued a cautious fourth-quarter outlook and said order backlogs fel𓃲l, feeding into concerns ab⛎out an economic slowdown.

Third-quarter revenue totaled $16.81 billion, a 12% increase from the year-ago quarter boosted by higher sales volumes. Profit came in at $2.79 billion, or an adjusted $5.52 per share, which was up more than 40% from $3.87 per share in the year-ago quarter, and easily exceeded consensus estimates of $4.75. Caterpillar's adjusted operating 澳洲幸运5开奖号码历史查询:profit margin, at 20.8%, improved by more than four percentage points from the same quarter last year.

Growth was particularly strong in North America, the company's home region, reflecting robust infrastructure spending boosted by government investment, along with gains in non-residential construction. On the other hand, the company expects continued weakness in China, with enterprise sales from the country as a share of the total likely to remain below the typical 5-10% range.

A Shrinking Backlog Raises Economic Worries

Caterpillar's order backlog fell $1.9 billion in the latest quarter compared with the year-ago period, a sign that demand for construction equipment worldwide could be stalling. The backlog shrank $2.6 billion from the preceding quarter, while dealer inventories increased by $600 million.

Despite this, executives on the company's earnings call said they are comfortable with market conditions.

Though the company expects dealer inventory to be higher at the end of 2023 than it was at the end of last year, 澳洲幸运5开奖号码历史查询:Chief Financial Officer (CFO) Andrew Bonfield said during the quarterly earnings call that the company "still expect(s)🧸 it to be within the typical three-to-four months of sales range."

"We are very comfortable with the level of inventory held by dealers overall," Bonfield said, noting that dealers would like more inventory in some circumstances.

The company projects "slightly higher" sales and revenue in the fourth quarter compared with the same quarter last year. However, Caterpillar's operating 澳洲幸运5开奖号码历史查询:profit margin ඣis expected to come in lower than in the third quarter.

Caterpillar, the world's biggest manufacturer of industrial and construction equipment with a fleet spanning the globe, is often viewed as a 澳洲幸运5开奖号码历史查询:bellwether for the global economy. This is because 澳洲幸运5开奖号码历史查询:construction spending tends to rise when economic growth is accelerating, and fall when growth is decelerating or a 澳洲幸运5开奖号码历史查询:recession is imminent. When the company's orders or revenue fall, it is often a viewed as a sign of lower construction spending—and economic growth—ahead.

As a cyclical 澳洲幸运5开奖号码历史查询:bellwether stock, CAT sဣhares have histo🎃rically been particularly vulnerable to economic downturns.

Caterpillar shares were down 5.8% at $228.12 in late-morning trading on Tuesday. The stock is now in negative territory for the year, and down from an all-time high of almost $290 per share at the start of August.