Caterpillar CEO Jim Umpleby says mining’s orderly capital spending pattern is set to continue in 2023 after growth in the US manufacturer’s mining-dominated resource industries business outpaced the rest of its machine and aftermarket sales in 2022.
Robust sales for the group in the December quarter – up 20% year-on-year to US$16.6 billion – helped drive the full-year total to $59.4b, 17% higher than the previous 12 months.
Resource industries, including quarry and aggregates activity, chimed in with $12.3b, up 25.5% on 2021. The December quarter sales total of $3.4b was 26% higher than the same time in 2021.
Umpleby said Caterpillar achieved all-time high earnings per share of $13.84 in 2022 ($10.81 in 2021).
“Our global team delivered one of the best years in our nearly 100-year history, including record full-year adjusted profit per share,” he said.
“Despite supply chain challenges, the team achieved double-digit top-line growth and generated strong ME&T [machinery, energy and transportation] free cash flow.”
Umpleby said he expected an “even better year on both the top and bottom line” in 2023.
Caterpillar had a $30b order backlog. Aftermarket activity and sales continued to trend positively, with $22b of services revenue in 2022 putting the company on track to hit its $28b target in 2026.
Umpleby said Caterpillar had 1.4 million “connected assets” in the field at the end of 2022 compared with 1.2 million in 2021. More than 60% of new equipment sold in 2022 was delivered with a customer value (service) agreement.
Umpleby said the capital discipline that continued to be generally seen among big miners was producing moderate, year-on-year growth in the market.
“That’s a really positive thing I think for them and for us,” he said.
“We have a strong backlog, which we feel good about. Parked trucks remain at low levels; there are high utilisation levels of equipment.
“We feel good about the mining business. Quotation activity is very strong and we’re having very good conversations with customers.”