Caterpillar's product floor. Source: Caterpillar.

It's been a rough year-and-a-half or so for Caterpillar (NYSE:CAT) as the company watched demand for its mining equipment plummet. That lack of demand has largely contributed to poor quarterly performances and management believes headwinds still exist as the company heads into 2014. All that said, even with revenue declining Caterpillar was able to soundly beat estimates in the fourth quarter. 

Starting from the top, revenue fell 10% in the fourth quarter to $14.4 billion, which was still ahead of analyst estimates of $13.6 billion. Caterpillars cost-cutting strategies are paying off on the bottom line as its fourth-quarter profit came in at $1 billion, or $1.54 per share, which was far ahead of last year's mark of $1.04 per share and analyst estimates of $1.28 per share.

Investors should note that the large improvement over last year's fourth quarter was due to a goodwill impairment charge a year ago and with that taken into account this year's performance was an increase over last year's fourth quarter by $0.08 per share.

Further, Caterpillar was able to reduce its inventory last year to the tune of $2.9 billion. That in combination with a record Machinery and Power Systems (M&PS) operating cash flow of $9 billion enabled the company to repurchase $2 billion of its stock and increase its dividend by 15% in 2013. With its previous share repurchase program completed ahead of schedule, Caterpillar's board of directors authorized a new $10 billion share repurchase program. Caterpillar also boasts a stronger balance sheet at the end of last year with its debt-to-capital ratio dropping roughly eight points to 29.7% -- its lowest mark in more than a quarter century.