Caterpillar (CAT) delivered higher fourth-quarter results on a yearly basis with earnings surpassing market expectations, aided by double-digit growth in its energy and transportation business.
The heavy equipment manufacturer on Monday reported adjusted earnings of $5.23 a share for the December quarter, up from $3.86 the year before, and ahead of the Capital IQ-polled consensus of $4.75. Sales and revenue increased 3% to $17.07 billion, but were just shy of the Street’s view for $17.13 billion. Shares of the company jumped 4.6% in premarket trading.
Caterpillar posted “record full-year sales and revenues, record adjusted profit per share and record (machinery, energy and transportation) free cash flow,” Chief Executive Jim Umpleby said in a statement. “We remain committed to serving our customers, executing our strategy and investing for long-term profitable growth.”
Machinery, energy and transportation revenue grew 2% to $16.24 billion. Energy and transportation climbed 12% to $7.67 billion, mainly due to higher sales volume and price gains. Construction industries and resource industries logged revenue declines of 5% and 6% as lower sales volume were driven by changes in dealer inventories.
Revenue in North America advanced 11%, while Latin America decreased 5%. Sales in Europe, Africa and the Middle East slipped 6% and Asia Pacific was down 3%. Order backlog declined by $3 billion year-on-year and by $600 million from the preceding quarter, the company said in an investor presentation.
Caterpillar anticipates full-year 2024 sales to be “broadly similar” to the previous year, according to the presentation. In 2023, revenue advanced 13% to $67.06 billion. The Street is currently estimating revenue of $67.72 billion for the ongoing year.
No substantial changes in machine dealer inventory is expected by the end of 2024, as compared with a build in the prior year, the company said. It also forecasts price realization to “modestly exceed” manufacturing costs for the current year.
For the ongoing quarter, Caterpillar is expecting sales and revenue to generally be in line with the result recorded in the prior-year period, while the Street is looking for $15.97 billion.