The heavy machinery supplier recorded fourth-quarter net income of $1.54 a share, 48% higher than in the same quarter of 2012 and significantly more than the $1.28 a share expected by Thomson Reuters-surveyed analysts. Quarterly revenue of $14.4 billion came in 10.4% lower than the year-ago period but managed to exceed consensus by $762 million.
Full-year sales and income saw a sharp decline from 2012, primarily driven by a drop in sales of new machines to the mining sector. Revenue of $55.66 billion was 16% lower and net income of $5.75 a share dropped 32% from $8.48 a share a year earlier. Analysts had expected more muted net income of $5.49 a share and revenue of $54.86 billion.
For 2014, management expects sales activity similar to 2013 -- around $56 billion within an estimate range of 5% on either side. Excluding restructuring costs, the company expects net profit of $5.85 a share.
By topping estimates, Caterpillar, the world's largest mining and construction equipment maker, took a step towards restoring confidence an industrial recovery was in motion, albeit with continued challenging conditions expected through 2014.
"We see some signs of improvement in the world economy," said CEO Doug Oberhelman in a statement.
However, one of its most profitable market segments, mining, will continue to spend conservatively over the year ahead.
"Despite our expectation that mine production will continue to increase, we expect mining companies to further reduce their capital expenditures in 2014. As a result, we're expecting sales in Resource Industries to decline modestly," continued Oberhelman.