Caterpillar Stock Hits Record High on Robust Q4 Earnings, Construction Boom

Shares of Caterpillar (NYSE:CAT), a leading construction and mining equipment manufacturer, surged to an all-time high on Monday after the company reported robust fourth-quarter earnings. Earnings per share of $5.23 beat Wall Street’s forecast of $4.75 by 10%, while revenue of $17.1 billion met expectations.

Management credited its strong performance to higher sales of equipment. Operating profit margins also increased from 10.1% to 18.4% on favorable pricing.

“[We] 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 (Machinery, Energy and Transportation) free cash flow,” said Caterpillar Chairman and CEO Jim Umpleby in a statement.

Caterpillar’s robust performance also highlights the growing divide between the health of the construction and agricultural sectors. Caterpillar has a larger exposure to the construction industry and has seen its shares rise 25% in the past year. The recovery in single-family housing starts has been particularly robust, rising 16% in 2023, according to the U.S. Census Bureau. Meanwhile, rival equipment maker Deere (NYSE:DE) has a larger exposure to the uncertain agricultural sector. Low agricultural commodity prices have depressed demand in the sector, sending Deere’s shares down 4% over the past year.

Though Caterpillar currently earns a fundamental B grade in Louis Navellier’s Portfolio Grader, its recent earnings beat will likely upgrade the stock to an A in the coming days. The firm is next expected to report earnings in April.

On the date of publication, Thomas Yeung did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Thomas Yeung produced this article using data from Thomson Reuters and unique generative AI prompts. These prompts help distill real-time quarterly earnings data and combine it with InvestorPlace.com’s best-in-class analysis. Our readers get a deep dive into financial results at lightning speed. These articles have been reviewed by a human editor prior to publication. To report any concerns or inaccuracies, please contact us at [email protected].

Tom Yeung is a market analyst and portfolio manager of the Omnia Portfolio, the highest-tier subscription at InvestorPlace. He is the former editor of Tom Yeung’s Profit & Protection, a free e-letter about investing to profit in good times and protecting gains during the bad.

InvestorPlace Earnings is a project that leverages data from TradeSmith to automate coverage of quarterly earnings reports. InvestorPlace Earnings distills key takeaways including earnings per share and revenue, as well as how a company stacks up to analyst estimates. These articles are published without human intervention, allowing us to inform our readers of the latest figures as quickly as possible. To report any concerns or inaccuracies, please contact us at [email protected].

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