Caterpillar stock to hit all time high after earnings beat
Shares of Caterpillar (CAT) are trending high Monday morning in pre-market trading as the company posted its fourth-quarter earnings, beating Wall Street expectations with an adjusted profit per share of $5.23. The company's reported full-year sales and revenues were up 13%.
Yahoo Finance Anchors Brad Smith and Seana Smith break down the latest developments for the construction machinery manufacturer.
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Editor's note: This article was written by Nicholas Jacobino.
Video Transcript
SEANA SMITH: Let's get to another top trending ticker here at Yahoo Finance, and that is Caterpillar-- shares on track to hit an all-time high in pre-market trading. They are set to open at an all-time high here as we see this move higher in pre-market trading. The company beating the Street's expectations here. Revenue, $17.1 billion in its fourth quarter. Adjusted profit per share of $5.23. You're looking at gains here ahead of the open, of about 4.5%, digging into these numbers just a bit here.
It's clear, my takeaway at least, Brad, is that demand has stayed relatively resilient, especially when you look at these North American numbers. Retail sales, they're up about 11%. They raised their margin target here by 100 basis points. Also saying that they expect to reach that in the top half of the new range in 2024. Early Street reaction looks to be pretty pleased with these results. TD Cowen calling it a strong quarter here for the company.
BRAD SMITH: Yeah, favorable price realization is what the company brought up a couple of times within this release. Now, take a look at this while we've got it up on the screen-- the construction sales by region. And actually, if you cascade even further down, you'll see some of the consolidated sales and revenues by region. North America really was the only bright spot on a regional basis. Everywhere else, you're looking at declines.
However, one of the huge things that kind of jumped out to me as the company gives just a little bit more of the details around this, North America specifically, saw that favorable price realization that I was mentioning earlier, offset by lower sales volumes. So that's interesting there. So despite that lower sales volume, which they're saying is driven by some of the impact from dealer inventories, they also still did see higher sales of equipment to end users.
So all this considered, dealer inventory did increase during the fourth quarter of 2022 compared with a decrease of the fourth quarter 2023. So improvement on inventory side. But at the end of the day, looking at Asia-Pacific, lower sales volumes, decreased sales volume driven by the impact from changes in dealer inventories as well.
You've got to think about what the spending into certain construction projects, as well within that region, especially as we've been monitoring the liquidation of one of the largest property developers within that region, how that cascades through to the number of projects that actually get greenlit to get started as of right now as well. And so that's something, of course, will be interesting to see, if the company comments on it, specifically in the earnings call.
SEANA SMITH: Yes, sir. And they were going to be talking to an analyst here later on in the hour, getting their perspective on what we're hearing from the conference call that's taking place right now.
