Caterpillar, the Dow Jones earthmoving giant, posted Q4 earnings that flattened earnings estimates, though revenue was in line with estimates amid customer inventory destocking. CAT stock jumped in early Monday stock market action and was set to begin the regular session at a record high.
Most aspects of the earthmoving giant's businesses have been thriving amid a $1-trillion federal windfall supporting manufacturing, mining and infrastructure projects. That funding has years to run. Still, revenue growth slowed sharply in Q4 as dealers pared inventories by $900 billion. Further, Caterpillar's backlog of future orders fell by $600 million after a $2.6 billion decrease in Q3.
Typically, CAT stock gets a valuation haircut when the order backlog begins to fall from its peak, but this time appears to be different.
Caterpillar Earnings
Results: Caterpillar reported Q4 adjusted EPS of $5.23, up 35% from a year ago and 47 cents ahead of estimates. Revenue grew 3% to $17.07 billion, roughly as expected.
Outlook: The Dow giant expects Q1 revenue and adjusted profit margin to be "broadly similar" to the first quarter of 2023. Caterpillar rang up $15.9 billion sales in Q1 of last year. The FactSet consensus for Q1 2024 sales is $16.1 billion.
CAT Stock
CAT stock rose 4.4% to 329 before Monday's open. On Friday, CAT motored 2.4% to 315.09, rising beyond the top of a buy zone from a 293.88 buy point to a record high.
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