Caterpillar Chairman and CEO Jim Umpleby announced the company achieved “the best year in our 98-year history” during its Q4 2023 earnings call on February 5.
Fourth-quarter 2023 sales and revenues for the manufacturer were up 3% to $17.1 billion compared with the same period last year.
Full-year sales and revenues totaled $67.1 billion, a 13% jump over 2022 results. Cat says the increase reflected favorable price realization and higher sales volume, driven by higher sales of equipment to end users, partially offset by the impact from changes in dealer inventories.
“I'm very proud of our global team's strong performance as they achieved the best year in our 98-year history, including record full-year sales and revenues, record adjusted profit per share and record ME&T free cash flow,” Umpleby said. “We remain committed to serving our customers, executing our strategy and investing for long-term profitable growth.”
Cat noted that the adjusted operating profit margin and adjusted profit per share for 2023 excluded restructuring costs, which included the divestiture of the company's Longwall business, and a benefit for certain deferred tax valuation allowance adjustments and mark-to-market gains for remeasurement of pension and other post-employment benefit (OPEB) plans. The adjusted operating profit margin was 20.5% in 2023, and full-year adjusted profit per share was $21.21.
Q4 Construction Equipment Sales
Machine sales to users, which includes Construction Industries and Resource Industries, rose by 3% in the fourth quarter of 2023.
Construction Industries sales specifically were up 4%, with Cat continuing to see strong sales and healthy demand in North America. “Non-residential continued to benefit from government related infrastructure and construction projects. Residential sales to users in North America also increased in the quarter,” Umpleby told investors. Meanwhile, construction sales declined in EAME, Latin America and Asia.
In Resource Industries, sales to users increased 1%. In mining, sales to users also increased and in heavy construction and quarry and aggregates, sales to users declined against a strong comparative in 2022.
2024 Outlook
Looking ahead to 2024, Cat expects demand to remain healthy across the markets it serves.
“We currently anticipate 2024 sales and revenues to be broadly similar to the record 2023 level,” Umpleby said. “We expect continued strength in end user demand, including services growth, and a slight benefit from carryover pricing, offset by a dealer inventory headwind, which was a $2.1 billion benefit in 2023. We currently do not anticipate a significant change in dealer inventory of machines in 2024 as compared to an increase in 2023.”
Umpleby shared the following outlook by region for the construction industry:
- North America: Construction sales are expected to remain healthy, with non-residential construction at similar demand levels to 2023 due to government-related infrastructure investments and residential construction healthy relative to historical levels.
- Asia Pacific: Excluding China, Cat predicts some softening in economic conditions. The company anticipates China will remain at a relatively low level for the above 10-ton excavator industry.
- EAME: The region will be slightly down due to economic uncertainty in Europe, somewhat offset by continuing strong construction demand in the Middle East.
- Latin America: Construction activity is expected to increase in the region due to easing financial conditions.
