Overview of Caterpillar’s Financial Performance

Caterpillar Inc., a leading manufacturer of construction and mining equipment, reported its financial results for the full year 2024. The company’s total sales and revenues for the year were $64.809 billion, a decrease of 3% compared to 2023. This decline was primarily driven by lower sales volume, partially offset by favorable price realization.

Profit per share for 2024 was $22.05, up from $20.12 in 2023. Excluding certain one-time items, adjusted profit per share was $21.90 in 2024 compared to $21.21 in 2023. Operating profit as a percentage of sales and revenues was 20.2% in 2024, up from 19.3% in 2023. The company’s adjusted operating profit margin, which excludes certain items, was 20.7% in 2024 compared to 20.5% in 2023.

Caterpillar generated strong cash flow, with enterprise operating cash flow of $12.0 billion in 2024. The company ended the year with $6.9 billion in cash on hand.

Trends and Economic Conditions

Caterpillar’s results continue to reflect the diversity of its end markets. In Construction Industries, the company expects moderately lower sales of equipment to end users in North America in 2025 compared to 2024, as construction activity remains healthy but dealer rental fleet loading is expected to decline.

In Resource Industries, Caterpillar anticipates lower sales of equipment to end users in 2025 compared to 2024, partially offset by higher services revenues, including robust rebuild activity. Customers continue to display capital discipline, although key commodity prices remain above investment thresholds.

For Energy & Transportation, demand is expected to remain strong in Power Generation, driven by increasing energy demands to support data center growth and generative artificial intelligence. The company also expects moderate growth in Oil and Gas in 2025.

Outlook for 2025

For the full-year 2025, Caterpillar anticipates sales and revenues will be slightly lower compared to 2024, primarily driven by lower sales volume and unfavorable price realization. The company expects lower sales in Construction Industries and Resource Industries to be partially offset by higher sales in Energy & Transportation.

In the first quarter of 2025, Caterpillar expects lower sales and revenues compared to the first quarter of 2024, primarily due to the unfavorable impact from changes in machine dealer inventories and unfavorable machine price realization.

The company continues to monitor external factors such as supply chain disruptions and inflationary pressures, and is working to minimize any challenges that may impact its ability to meet customer demand.

Segment Performance

Construction Industries Construction Industries’ total sales were $25.455 billion in 2024, a decrease of 7% compared to 2023. The decrease was primarily due to lower sales volume, driven by lower sales of equipment to end users. Profit in this segment was $6.165 billion in 2024, a decrease of 12% compared to 2023.

Resource Industries Resource Industries’ total sales were $12.389 billion in 2024, a decrease of 9% compared to 2023. The decrease was primarily due to lower sales volume, partially offset by favorable price realization. Profit in this segment was $2.533 billion in 2024, a decrease of 11% compared to 2023.

Energy & Transportation Energy & Transportation’s total sales were $28.854 billion in 2024, an increase of 3% compared to 2023. The increase was primarily due to favorable price realization. Profit in this segment was $5.736 billion in 2024, an increase of 16% compared to 2023.

Financial Products Segment Caterpillar’s Financial Products segment, which provides financing and insurance services, had revenues of $4.053 billion in 2024, an increase of 7% compared to 2023. Segment profit was $932 million in 2024, an increase of 3% compared to 2023.

Restructuring and Other Costs

In 2024, Caterpillar incurred $164 million in restructuring costs related to the divestitures of certain non-U.S. entities and $195 million in other restructuring costs. The company also recognized a $154 million gain from pension and OPEB mark-to-market adjustments and a $224 million discrete tax benefit related to a change in tax law.

For 2025, Caterpillar expects to incur approximately $150 million to $200 million in restructuring costs. The company anticipates prior restructuring actions will result in an incremental benefit to operating costs of about $25 million in 2025 compared to 2024.

Liquidity and Capital Resources

Caterpillar generated $12.04 billion in consolidated operating cash flow in 2024, down $850 million from 2023. The decrease was primarily due to changes in accrued wages, salaries, and employee benefits, as well as higher cash taxes paid, partially offset by lower working capital requirements.

Total debt as of December 31, 2024 was $38.41 billion, an increase of $531 million from the end of 2023. Debt related to the Machinery, Energy & Transportation (ME&T) segment decreased $893 million, while debt related to the Financial Products segment increased by $1.54 billion.

Caterpillar ended 2024 with $6.89 billion in cash and cash equivalents, as well as $1.98 billion in available-for-sale debt securities. The company believes its cash position, along with cash generated from operations and continued access to debt markets, will be sufficient to satisfy its cash requirements over the next 12 months and beyond.

Outlook and Priorities

For the full-year 2025, Caterpillar expects sales and revenues to be slightly lower compared to 2024, primarily due to lower sales volume and unfavorable price realization. The company anticipates unfavorable price realization and higher depreciation costs in 2025.

Caterpillar’s long-term cash deployment strategy focuses on maintaining a strong financial position to support a mid-A credit rating, funding operational requirements and commitments, and funding strategic growth initiatives while returning capital to shareholders through dividends and share repurchases.

In 2024, the company repurchased $7.7 billion of its common stock, with $20.1 billion remaining under its current share repurchase authorizations as of December 31, 2024. Caterpillar’s Board of Directors approved maintaining the quarterly dividend at $1.41 per share.

Conclusion

Caterpillar delivered solid financial results in 2024, with improved profitability and strong cash flow generation. The company’s diverse end markets and focus on strategic initiatives, such as expanded offerings, services, and sustainability, position it well for the future. While facing some near-term headwinds, Caterpillar remains committed to maintaining a strong financial position and returning capital to shareholders over the long term.