Caterpillar 2020 sales and revenues were down 22 percent compared to 2019, to $41.7 billion from $53.8 billion. The company cited decreased end-user demand and reductions in dealer inventories. Dealers decreased inventories more during the fourth quarter of 2020 than during the fourth quarter of 2019. Operating profit for the year was $4.553 billion, down 45 percent from $8.290 billion in 2019, and operating profit margin was 10.9 percent.
Fourth quarter 2020 sales were down 15 percent from Q4 2019, to $11.2 billion compared to $13.1 billion. Operating profit was $1.4 billion for the quarter, down 25 percent from $1.9 billion in Q4 2019. The decrease was primarily the result of lower sales volume partially offset by lower manufacturing costs; and selling, general and administrative (SG&A) and research and development (R&D) expenses.
“Our fourth-quarter and full-year results reflect the team’s agility in a challenging environment while executing our strategy for long-term profitable growth,” said Jim Umpleby, chairman/CEO, in a prepared statement. “We achieved the adjusted operating profit margin established during our 2019 Investor Day while continuing to invest in products and services. We are well-positioned for the future and will emerge from the pandemic as an even stronger company.”
Fourth-quarter sales for the company’s Construction Industries were $4.5 billion, down 10 percent from $5.0 billion in the same period in 2019. The company cited lower sales volume, driven by the impact from changes in dealer inventories and slightly lower end-user demand.
Enterprise operating cash flow for the year was $6.3 billion. Caterpillar paid dividends of $2.2 billion and repurchased $1.1 billion of common stock. Liquidity remains strong with an enterprise cash balance of $9.4 billion at the end of 2020.
In the video below, Caterpillar CFO Andrew Bonfield reviews the results.
Source: Caterpillar