Caterpillar (CAT) Q4 2023 earnings summary

Executive summary

• FY 2023 sales and revenues, adjusted profit per share and ME&T free cash flow set records; sales rose 13% to $67.1B.

• 2023 was described as the best year in 98 years.

• Q4 sales and revenues rose 3% YoY to $17.1B; stronger pricing and Energy & Transportation sales offset lower machine sales volumes and dealer inventory declines.

Financial highlights

• FY operating profit was $12.966B, up 64%; adjusted operating profit reached a record $13.7B, up 51%.

• FY profit per share was $20.12; adjusted profit per share was a record $21.21, up 53%.

• Q4 operating profit rose 87% to $3.134B; adjusted operating profit was $3.2B, up 15%.

• Q4 GAAP profit was $2.676B, or $5.28 diluted EPS; adjusted EPS was $5.23 versus $3.86 a year earlier.

• Enterprise operating cash flow was $12.9B for 2023; year-end enterprise cash was $7.0B.

Outlook and guidance

• FY 2024 sales and revenues expected broadly similar to 2023; adjusted operating profit margin expected in the top half of the range for the corresponding revenue level.

• FY 2024 ME&T free cash flow expected in the top half of the $5B–$10B target range; price realization expected to modestly exceed manufacturing costs.

• Updated adjusted operating profit margin targets are 10%–14% at $42B revenue and 18%–22% at $72B; revenue range remains $42B–$72B.

• FY 2024 sales expected to include another year of services growth, toward a $28B target by 2026; no significant change in machine dealer inventory expected by year-end.

• Q1 2024 sales and revenues and adjusted operating profit margin expected broadly similar to Q1 2023.