Caterpillar Inc. announced fourth-quarter and full-year results for 2019. Sales and revenues for the fourth quarter of 2019 were $13.1 billion, an 8% decrease compared with $14.3 billion in the fourth quarter of 2018. Fourth-quarter 2019 profit per share was $1.97, compared with $1.78 profit per share in the fourth quarter of 2018. Adjusted profit per share in the fourth quarter of 2019 was $2.63, compared with fourth-quarter 2018 adjusted profit per share of $2.55.
“In the fourth quarter, strong cost control more than offset lower-than-expected end-user demand,” said Jim Umpleby, Caterpillar Chairman and CEO. “Our margin performance reflected our diligent focus on maintaining a flexible and competitive cost structure.”
Full-year sales and revenues in 2019 were $53.8 billion, down 2% compared with $54.7 billion in 2018. Full-year profit was $10.74 per share in 2019, compared with profit of $10.26 per share in 2018. Adjusted profit per share in 2019 was $11.06, compared with adjusted profit per share of $11.22 in 2018.
“While sales declined modestly in 2019, we delivered an operating margin and free cash flow consistent with our long-term targets and continued to invest in services and expanded offerings,” said Umpleby. “The team’s focus on executing our strategy for profitable growth also allowed us to increase our dividend by 20% and return more than $6 billion in capital to shareholders through dividends and share repurchases.”
Operating profit margin was 14.1% for the fourth quarter of 2019, compared with 13.1% for the fourth quarter of 2018. Operating profit margin was 15.4% for 2019, compared with 15.2% for 2018. In 2019, adjusted profit per share excluded mark-to-market losses for remeasurement of pension and other postemployment benefit (OPEB) plans and a discrete tax benefit related to U.S. tax reform.
In 2018, adjusted profit per share excluded mark-to-market losses for remeasurement of pension and OPEB plans, restructuring costs, the impact of U.S. tax reform and certain deferred tax valuation allowance adjustments.
For the full year of 2019, enterprise operating cash flow was $6.9 billion. Full-year 2019 ME&T operating cash flow was $4.9 billion after a discretionary pension contribution of $1.5 billion financed from proceeds of a debt issuance. In the fourth quarter of 2019, the company repurchased about $760 million of Caterpillar common stock and paid dividends of $568 million. During the year, the company repurchased $4.0 billion of Caterpillar common stock and paid dividends of $2.1 billion. After returning about $6.2 billion of capital to shareholders, the enterprise cash balance was $8.3 billion at the end of 2019, compared with $7.9 billion at the end of 2018.
The company expects 2020 profit to be in a range of $8.50 to $10.00 per share.
“We expect continued global economic uncertainty to pressure sales to users in 2020 and cause dealers to further reduce inventories,” said Umpleby. “We have improved our lead times and remain prepared to respond quickly to any positive or negative changes in customer demand. We will continue to invest in services and expanded offerings to advance our strategy for long term profitable growth, while achieving our Investor Day targets.”
The outlook does not include a mark-to-market gain or loss for remeasurement of pension and OPEB plans.
To view the full Q4 2019 earnings statement, click here.