Release Date: January 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: How is Caterpillar viewing the data center business, and what are the expectations for demand? A: Jim Umpleby, Chairman and CEO, stated that Caterpillar continues to see strong demand for both reciprocating engines and gas turbines, driven by data center growth. Customers are planning orders over multiple years, and the company is expanding capacity for large reciprocating engines by 125% over the next several years.
Q: What is the outlook for dealer inventories, particularly in North American construction? A: Andrew Bonfield, CFO, explained that dealer inventories are expected to remain stable in 2025. While there was a build in 2023 and a reduction in 2024, the expectation is for no significant change in 2025, based on dealer conversations and market outlook.
Q: Can you provide an outlook on the oil and gas business, particularly regarding gas compression? A: Jim Umpleby noted that moderate growth is expected in 2025 for oil and gas. While reciprocating engine services may decline slightly, solar turbines have a healthy backlog and order activity, particularly in gas compression and transmission in the U.S.
Q: How is Caterpillar managing price-cost dynamics, and what are the expectations for 2025? A: Andrew Bonfield mentioned that while material costs are expected to decline, other manufacturing costs, including depreciation, will offset this benefit. The company anticipates price realization to be slightly negative due to post-sales merchandising programs, particularly impacting the first half of 2025.
Q: What are the expectations for the Energy & Transportation segment in 2025, considering capacity constraints? A: Jim Umpleby stated that while capacity constraints exist, particularly in large engines, investments are being made to increase capacity by 125% over four years. Growth is expected in 2025, but capacity expansion will take time to fully impact sales.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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