Caterpillar Beats Q4 Earnings but Warns of 2025 Sales Dip

PEORIA, Ill. — Caterpillar Inc. (CAT), the global leader in construction and mining equipment, reported stronger-than-expected fourth-quarter earnings Thursday, defying a four-quarter streak of declining sales. However, the company forecast slightly lower sales for 2025, sending its stock down in early trading and contributing to a dip in the Dow Jones Industrial Average.

The Deerfield, Illinois-based company posted adjusted earnings of $5.28 per share, surpassing analyst estimates of $4.75. Revenue for the quarter reached $16.6 billion, a 3% year-over-year decline but still above Wall Street expectations of $16.2 billion.

“While we’re pleased with our Q4 performance, we’re seeing some headwinds in key markets,” said Caterpillar CEO Jim Umpleby during the earnings call. “The global economic environment remains uncertain, particularly in construction and mining sectors.”

Caterpillar’s stock fell 2.3% in early trading Thursday, dragging down the Dow Jones Industrial Average alongside Microsoft‘s 1.8% decline. The company’s shares had been approaching a potential buy point ahead of the earnings release, according to market analysts.

The company attributed its better-than-expected earnings to improved pricing and cost management, which helped offset weaker sales volumes. Caterpillar’s energy and transportation segment showed particular strength, with sales increasing 12% year-over-year.

Looking ahead, Caterpillar expects 2025 sales to be slightly lower than 2024 levels, contrary to analyst predictions of modest growth. The company cited potential economic slowdowns in China and Europe as primary concerns, along with ongoing supply chain challenges.

“Caterpillar remains a bellwether for global industrial activity,” said Morningstar analyst Scott Pope. “Their cautious outlook for 2025 suggests they’re seeing signs of economic softening that haven’t yet appeared in broader economic data.”

The company’s performance is closely watched as an indicator of global economic health, given its extensive operations in construction, mining, and energy sectors worldwide. Caterpillar’s dealer inventory levels, a key metric for future sales, remained stable in the fourth quarter.

Despite the sales forecast, Caterpillar maintained its commitment to shareholder returns, announcing a 8% increase in its quarterly dividend and $1.5 billion in stock repurchases during the quarter. The company ended 2024 with $7.3 billion in cash and short-term investments.