Caterpillar (CAT) Q3 2024 earnings summary

Executive summary

• Third-quarter 2024 sales and revenues were $16.1 billion, down 4% year-over-year, mainly due to lower equipment sales and less dealer inventory build.

• Adjusted operating profit margin was strong at 20.0%, with adjusted profit per share at $5.17, both declining from the prior year but above the top end of the target range.

• ME&T free cash flow was robust at $2.7 billion for the quarter and $6.4 billion year-to-date, supporting over $9 billion returned to shareholders through dividends and share repurchases in the first three quarters.

• Backlog increased slightly to $28.7 billion, with strong demand in energy and transportation offsetting declines in machines.

• Results benefited from diverse end markets and continued execution of long-term profitable growth strategy.

Financial highlights

• Q3 2024 sales and revenues were $16.1B, down 4% year-over-year, primarily due to a $759M drop in sales volume and less favorable dealer inventory changes.

• Q3 operating profit was $3.1B, down 9% year-over-year; adjusted operating profit was $3.2B.

• Adjusted profit per share for Q3 was $5.17 (vs. $5.52 in Q3 2023); reported profit per share was $5.06.

• Service revenues increased year-over-year, and financial products revenues rose 6% to about $1.03 billion, with segment profit up 21%.

• Enterprise cash and cash equivalents at quarter-end were $5.6 billion.

Outlook and guidance

• Full-year 2024 sales and revenues are expected to be slightly below prior estimates due to lower Q3 sales and reduced dealer rental fleet loading.

• Adjusted operating profit margin and adjusted profit per share expectations remain unchanged and above the top end of the target range.

• ME&T free cash flow for the year is now expected near the top of the $5–$10 billion target range.

• CapEx for the year is anticipated to be around $2 billion, with restructuring costs of approximately $400 million and an effective tax rate (ex-discrete items) at 22.5%.

• Q4 2024 sales and revenues anticipated to be slightly lower year-over-year, with lower machine sales to end users.