The performance is well short of the $3.12 Wall Street was looking for, according to Zacks Investment Research. Earnings per share rose even as net income slid 5% because Caterpillar had fewer shares outstanding. During the second quarter, the company spent $1.4 billion on stock buybacks.
The dependence of Caterpillar's customers on heavy equipment and machinery makes the company vulnerable to the volatility of the energy sector. In the past three months, crude prices have fallen nearly 14% while natural gas is down more than 10%. Crude prices are down 17% over the past year, with natural gas is down almost 18%.
The company's revenue rose to $14.43 billion from $14.01 billion, but was just shy of analyst projections. Caterpillar said its revenue increase was mostly due to higher prices and increased sales volume driven by improved equipment demand.
Caterpillar still expects full-year earnings between $12.06 and $13.06 per share. The company said it currently anticipates being at the lower end of that range. Analysts polled by FactSet predict earnings of $12.26 per share.
Shares of Caterpillar Inc., based in Deerfield, Illinois, tumbled 4.5% to $131.82 in afternoon trading.
This story has been corrected to show that Caterpillar expects to earn between $12.06 and $13.06 per share for the full year, not $11.75 to $12.75 per share.
Portions of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on CAT at https://www.zacks.com/ap/CAT