3Q Earnings Spotlight: Caterpillar, 3M, and Microsoft

Caterpillar Consumers Appear Reluctant to Make Large Purchases

Earnings season continues and investors are eagerly parsing through reports to see how companies and industries performed during the summer and early fall.

The heavy machinery maker, Caterpillar (CAT) handed in its report card on Tuesday. Revenue for the company’s three main global segments fell. Construction machinery sales declined by 23%, mining equipment revenue dropped by 21%, and energy and transportation product revenue sank by 24%.

Most of Caterpillar’s products are big-ticket items sold to businesses rather than to individual consumers. The COVID-19 pandemic has impacted many industries that rely on Caterpillar’s equipment, and it seems that companies are wary of making large investments during such an uncertain time. Caterpillar’s earnings report contrasts with those of companies that sell construction supplies directly to consumers. The DIY home improvement boom has given companies like Home Depot (HD) a boost.

3M Ramps Up N95 Mask Production

Meanwhile, 3M (MMM), the conglomerate specializing in worker safety, healthcare, and consumer goods, beat expectations with its latest report. The Minnesota-based company posted a profit of $1.41 billion—which was lower than its $1.58 billion profit during the same period last year, but higher than analysts predictions.

3M reported weak sales of office supplies and equipment used for non-emergency medical procedures such as teeth cleaning systems. However, sales of face masks rose by $235 million compared to levels a year ago. 3M has sold 1.4 billion N95 masks so far in 2020 and expects to sell 2 billion by the end of the year. By the beginning of 2021, the company will have more than tripled its N95 production capabilities.

Microsoft Beats Expectations as Remote Work Continues

Microsoft (MSFT) reported its fiscal first quarter earnings after the bell yesterday. The company’s revenue clocked in at $37.2 billion, which handily beat analysts’ expectations of $35.76 billion. Although the tech giant’s sales climbed 12% on an annualized basis, this was down slightly from 13% growth during the previous quarter. Revenue from Microsoft’s Azure public cloud rose 48%.

As many companies continue to work remotely, demand for Microsoft’s cloud services has stayed strong. Analysts expect this arm of Microsoft’s business to continue to see growth next quarter. Microsoft will also launch its newest Xbox Series X game console next month, which could give the company’s hardware sales and revenue a boost.

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