Caterpillar Falls as Shrinking Backlog Stokes Demand Worry
- Reduced backlog points to waning consumer equipment needs
- Management says backlog is normalizing from pandemic days
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Caterpillar Inc.’s stock tumbled to the lowest level since early June after the company said its order backlog shrank in the third quarter, a sign the market sees as slowing demand for its iconic yellow machinery in the coming months.
The year-on-year decline of $1.9 billion is the first since the third quarter of 2020, when Caterpillar was grappling with the effects of Covid-19 shutdowns on its sales, according to data compiled by Bloomberg. When analysts asked about the drop during the company’s earnings call, management said supply chain hangups and long lead times are improving, meaning customers don’t need to order as far ahead to receive machines on time.