Caterpillar Beats Q4 EPS Estimates But Revenue Disappoints – Machinery, Energy, Transportation Segment Faces Pressure

Caterpillar Inc. CAT shares are trading lower after the company reported worse-than-expected fourth-quarter 2024 results.

Total sales and revenue for the quarter declined 5% year-over-year to $16.215 billion, missing the consensus of $16.411 billion.

CAT's adjusted earnings were $5.14 per share, compared to $5.23 a year ago and above the consensus of $4.99.

The sales decline was primarily driven by an $859 million drop in volume, impacted by lower dealer inventories and reduced equipment sales. Dealer inventories fell by $1.3 billion in Q4 2024, compared to a $900 million decrease in Q4 2023.

Operating profit fell 7% to $2.924 billion, down $210 million, mainly due to lower sales volume. The operating profit margin was 18%, down from 18.4% a year ago. The adjusted margin fell to 18.3% from 18.9%.

Enterprise operating cash flow was $12.035 billion compared to $12.885 billion a year ago. The company ended fiscal 2024 with $6.896 billion of enterprise cash.

CAT spent $7.7 billion on share repurchases and $2.6 billion on dividends during the year.

The revenue of the machinery, energy & transportation segment declined 6% YoY, with construction Industries down 8%, Resource Industries down 9%, energy & transportation flat as did other segments.

2025 Outlook: Caterpillar Sales are expected to decline ~1% due to unfavorable pricing, with a slight headwind in other income from lower interest income and currency effects.

The company anticipates $150 million–$200 million in restructuring costs, $2.5 billion in capital expenditures, and a 23% effective tax rate.

Price Action: CAT is trading lower by 5.33% at $371.51 premarket at the last check Thursday.