Caterpillar Sales Drop Amid Economic Challenges

Caterpillar Inc. reported a decline in fourth-quarter 2024 sales and revenue by 5% year-over-year to $16.215 billion, missing consensus estimates of $16.411 billion, despite surpassing earnings expectations at $5.14 per share. The decline was primarily due to lower dealer inventories and reduced equipment sales, with inventory falling by $1.3 billion. The company's operating profit also dropped 7% to $2.924 billion with a slight decrease in the operating margin to 18%. Despite outperforming the market earlier this year, Caterpillar's stock fell over 5% pre-market as investors reacted to the fifth consecutive revenue miss and elevated inventory levels at dealerships. For 2025, Caterpillar anticipates a 1% sales decline due to unfavorable pricing, restructuring costs, and economic headwinds, including potential tariff increases and lower demand from China and Europe. However, there is optimism around potential upticks in the energy sector and infrastructure projects that could benefit Caterpillar in the coming year.