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CAT NYSE· Caterpillar Inc
Earnings report Q4 2023

Caterpillar Reports Strong Revenue Growth in Latest Quarter

Segments of revenue

Caterpillar's total sales and revenues for the latest quarter were $67.060 billion, representing a significant increase of $7.633 billion or 13 percent compared to the same quarter in the previous year. This growth was primarily driven by favorable price realization and higher sales volume. Sales of Machinery, Energy & Transportation accounted for $63.869 billion of the total revenue, while revenues of Financial Products contributed $3.191 billion.

Strengths

Caterpillar's strong revenue performance can be attributed to several factors. Firstly, the company benefited from favorable price realization, indicating that they were able to sell their products at higher prices. Additionally, higher sales volume, particularly in equipment sales to end users, played a significant role in driving revenue growth. It is worth noting that the increase in sales volume was partially offset by changes in dealer inventories. Overall, Caterpillar's ability to generate higher sales and revenues reflects the company's strong market position and demand for its products.

Challenges

Despite the positive revenue growth, Caterpillar faced some challenges in the latest quarter. The company experienced higher selling, general, and administrative (SG&A) expenses, as well as research and development (R&D) expenses. These increased costs may have impacted the company's profitability to some extent. Furthermore, unfavorable manufacturing costs and the divestiture of the Longwall business also had a negative impact on operating profit.

Noteworthy

One noteworthy aspect of Caterpillar's performance in the latest quarter is the absence of a goodwill impairment charge related to the Rail division, which had negatively impacted the previous year's results. This absence contributed to the significant increase in operating profit for the current quarter.

Summary

Caterpillar delivered a strong performance in terms of revenue growth in the latest quarter. The company's total sales and revenues increased by 13 percent, primarily driven by favorable price realization and higher sales volume. Caterpillar's ability to sell its products at higher prices and generate increased sales to end users demonstrates its market strength. However, the company faced challenges such as higher SG&A and R&D expenses, as well as unfavorable manufacturing costs. The absence of a goodwill impairment charge from the previous year's results positively impacted the current quarter's operating profit. Overall, Caterpillar's revenue growth reflects its solid market position and demand for its products.

Source documents

Form 10-K  filed on Feb 16, 2024
136 pages scanned

Reference data

Company financials Q4 revenue 17.07B
Analyst estimates Q4 EPS beat by 10.06%
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