Caterpillar Inc. (NYSE: CAT) is a leading manufacturer in the construction and mining equipment industry. The company is known for its heavy machinery and engines, serving a global market. Despite its strong market presence, Caterpillar faces competition from companies like Komatsu and John Deere. On January 30, 2025, Caterpillar reported earnings per share (EPS) of $5.14, exceeding the estimated $5.02.
The reported EPS of $5.14 also surpassed the Zacks Consensus Estimate of $4.97, marking an earnings surprise of 3.42%. However, this figure represents a slight decrease from the $5.23 EPS reported in the same quarter last year. Despite the earnings beat, Caterpillar's revenue for the quarter was $16.22 billion, falling short of the Zacks Consensus Estimate by 2.57% and lower than the $17.07 billion reported a year ago.
Caterpillar's revenue miss continues a trend of underperforming revenue expectations, which has negatively impacted its stock. The company has consistently exceeded consensus EPS estimates in three of the past four quarters but has struggled to meet revenue expectations. This pattern has led to a decline in stock value and raised concerns about the company's future performance.
For the full year of 2024, Caterpillar's sales and revenues totaled $64.8 billion, a 3% decrease from $67.1 billion in 2023. This decline was primarily due to a lower sales volume of $3.5 billion, partially offset by favorable price realization of $1.2 billion. Despite the revenue decline, the full-year profit per share rose to $22.05, compared to $20.12 in 2023.
Caterpillar's financial metrics provide insight into its market valuation and financial health. The company's price-to-earnings (P/E) ratio is approximately 16.98, while the price-to-sales ratio is about 2.75. The enterprise value to sales ratio is around 3.24, and the enterprise value to operating cash flow ratio is approximately 16.85. These figures, along with an earnings yield of about 5.89% and a debt-to-equity ratio of approximately 1.95, highlight Caterpillar's financial leverage and cash-generating ability.
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