- Caterpillar Inc (NYSE:CAT) reported fourth-quarter sales and revenue growth of 23% year-over-year to $13.79 billion, beating the consensus of $13.15 billion.
- The company attributed the increase primarily to higher sales volume, driven by higher end-user demand for equipment and services, and the impact from changes in dealer inventories, along with favorable price realization.
- Segment Revenue: Construction Industries $5.74 billion (+27% Y/Y), Resource Industries $2.76 billion (+27% Y/Y), and Energy & Transportation $5.73 billion (+19% Y/Y).
- Adjusted EPS improved to $2.69 compared to $2.12 in 4Q20, beating the consensus of $2.26.
- The operating profit increased by 16.7% Y/Y to $1.61 billion, and the margin contracted by 61 bps to 11.7%.
- Caterpillar generated operating cash flow for FY21 of $7.2 billion, compared to $6.33 billion a year ago. It ended the quarter with $9.26 billion of cash and cash equivalents.
- Construction Industries' profit was $788 million (+25% Y/Y) and the Segment profit margin contracted by 30 bps to 13.7%.
- Resource Industries' profit was $305 million (+12% Y/Y) and segment profit margin contracted by 150 bps to 11%.
- Energy & Transportation's profit was $675 million (-2% Y/Y) and the segment profit margin contracted by 250 bps to 11.8%.
- The company returned $5 billion to shareholders through dividends and share repurchases in 2021.
- Outlook: Caterpillar expects stronger sales in 1Q22 versus 1Q21, continued end-user solid demand, and favorable prices.
- It also expects headwinds to adjusted operating profit margin in 1Q 2022 versus 1Q 2021 and margins to improve throughout 2022. Capex of ~$1.4 billion.
- Price Action: CAT shares are trading lower by 1.62% at $208.73 during the premarket session on Friday.
