Caterpillar experienced a sales drop of 21% in the first quarter as the coronavirus pandemic disrupted demand in the construction and mining sectors.
The industrial giant on Tuesday reported revenues of $10.6 billion in the first quarter, compared with $13.5 billion in the first quarter of 2019. The decline was due to lower sales volume driven by "lower end user demand" and the impact from changes in dealer inventories, the company said.
Shares of Caterpillar rose 0.2% Tuesday following the quarterly results.
Caterpillar reported adjusted earnings per share of $1.60 in the first quarter, compared with $2.94 adjusted profit per share in the same quarter a year ago. Wall Street was anticipating earnings per share of $1.69 on revenue of $10.916 billion, based on Refinitiv consensus estimates.
"We have taken decisive actions to enhance our strong financial position, while continuing to execute our strategy for profitable growth," Caterpillar chairman and CEO Jim Umpleby said in a statement. "Caterpillar has faced and overcome many challenges in our 95-year history. Our goal is to emerge from the pandemic an even stronger company."
Caterpillar's stock tumbled 22% this year as it experienced a drop in machine sales amid the coronavirus-triggered shutdowns. The company said it is not providing a financial outlook for 2020 at this time given the "continued global economic uncertainty" due to the pandemic.
The heavy equipment maker said about 75% of the company's primary production facilities continue to operate amid the pandemic, while some facilities that were temporarily closed have reopened.
To reduce costs, Caterpillar is withholding annual salary increases and bonuses this year for many employees and all senior executives.
Morgan Stanley on Monday downgraded Caterpillar to underweight from equal weight, saying it sees a possible multi-year downturn in non-residential construction.
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