#USA #Nashville #Financial Services #Caterpillar #Cat Financial

Cat Financial Reports Year-End Results for 2024

Cat Financial, a subsidiary of Caterpillar Inc., has recently disclosed its financial results for the fiscal year ending in December 2024. The company achieved revenues totaling $3.49 billion, marking a 7% increase from the $3.25 billion reported in 2023. This growth can be attributed largely to higher average financing rates and increased average earning assets.

Key Financial Highlights

• - Revenue Growth: The company experienced a revenue increase of $241 million, driven by favorable conditions such as an uptick in average financing rates (+$153 million) and a rise in average earning assets (+$127 million). However, this revenue growth was partially offset by an increase in outflows related to repossessed equipment, which accounted for a loss of $34 million.
• - Profit Dynamics: Profit for the year stood at $598 million, a 6% increase. Yet, profit before taxes saw a significant decline of 30%, dropping to $533 million, influenced by a $210 million loss on a divestiture of a non-U.S. entity. When excluding this divestiture loss, the reduced profit still reflected added operational expenses.
• - Income Tax Benefits: The tax benefit for 2024 was $66 million, contrasting with a $192 million expense incurred in 2023. This shift included a non-cash benefit of $224 million resulting from a tax law change pertaining to currency translation.

Performance Analysis

For 2024, Cat Financial reported an increased retail new business volume of $13.24 billion, an approximately 9% rise from the previous year's $12.11 billion. This increment was largely fueled by robust performance and volume growth in North America.
Additionally, at the close of 2024, the rate of past dues fell to 1.56%, down from 1.79% previously noted, indicating improved credit quality. Write-offs also increased slightly, totaling $115 million against $65 million in 2023, which highlights the challenging credit environment the company faced during the year.

Fourth Quarter Performance

The fourth quarter of 2024 demonstrated promising financial outcomes. Cat Financial reported revenues of $883 million, reflecting a 5% increase from $841 million achieved during the same period in 2023. Furthermore, profit during the fourth quarter surged remarkably to $357 million, marking an amazing 115% increase year-over-year.
However, profit before tax displayed a drop of 23%, mainly due to higher credit loss provisions and a decrease in profit margins. The retail new business volume for this quarter was approximately $3.69 billion, achieving 3% growth from $3.60 billion recorded in Q4 of 2023.

Strategic Outlook

Dave Walton, President of Cat Financial, expressed satisfaction with the company's performance, emphasizing the health of their global portfolio throughout 2024. “We are encouraged by the strong retail new business volume and have achieved the lowest past due percentage since 2005.” He reiterated the company's commitment to executing strategic goals and providing top-notch financial service solutions to cater to their extensive customer base worldwide.

About Cat Financial

As a pivotal arm of Caterpillar Inc., Cat Financial delivers essential financing solutions for equipment, engines, and parts. With headquarters in Nashville, Tennessee, Cat Financial actively serves a diverse clientele across various global markets. For more information about their offerings, head to cat.com.