Caterpillar (NYSE:CAT) reported a mixed first quarter of 2024, with earnings surpassing analysts' expectations but revenue falling short, causing its stock to slide 1.8%. The company announced an adjusted profit per share of $5.60, exceeding the consensus estimate by $0.46. However, revenue for the quarter was $15.8 billion, not meeting the $16 billion analysts had anticipated.
The machinery giant experienced a relatively flat revenue compared to the first quarter of the previous year, with a negligible decline of $63 million. This was attributed to lower equipment sales to end users, partially offset by favorable price realization and a slight increase in Financial Products' revenues. Despite the revenue shortfall, Caterpillar achieved a record adjusted profit per share, rising from $4.91 in the first quarter of 2023 to $5.60 in the same quarter of 2024.
Chairman and CEO Jim Umpleby expressed satisfaction with the company's performance, highlighting the higher adjusted operating profit margin and robust free cash flow. The strong financial position enabled Caterpillar to return a record $5.1 billion to shareholders through dividends and share repurchases in the first quarter. "We continue to execute our strategy for long-term profitable growth," Umpleby stated.
Operating profit margin improved to 22.3% in the first quarter of 2024, up from 17.2% in the corresponding quarter of the previous year. The adjusted operating profit margin also saw an increase, reaching 22.2% compared to 21.1% in the first quarter of 2023.
The company's enterprise operating cash flow stood at $2.1 billion, ending the quarter with $5.0 billion in enterprise cash. Despite the positive financial metrics, the slight decline in stock price reflects investor reaction to the revenue miss. The company's performance in the Energy & Transportation segment was a bright spot, with increased sales, while the Construction Industries and Resource Industries segments saw lower sales.
Caterpillar's results demonstrate resilience in profitability amid a challenging sales environment, with the company leveraging favorable pricing and cost management to maintain strong margins and shareholder returns.