Summary
Caterpillar Inc.'s 2019 annual report (filed Feb 2020) shows a slight year-over-year decrease in sales and revenues to $53.8 billion, primarily driven by lower sales volume due to changes in dealer inventories, though end-user demand provided some offset. Despite the revenue dip, profit per share saw a modest increase to $10.74, benefiting from lower SG&A and R&D expenses, as well as a strong performance from the Financial Products segment. The company's core Machinery, Energy & Transportation (ME&T) segment experienced sales declines in Construction Industries and Energy & Transportation, while Resource Industries remained relatively flat. The company maintained a strong operating cash flow of $6.9 billion, which was sufficient to cover capital expenditures and dividends. Caterpillar's liquidity position remained robust, with $8.3 billion in cash and short-term investments at year-end. The company also continued its capital allocation strategy, repurchasing $4.05 billion in common stock and paying dividends, indicating a focus on returning value to shareholders while managing its financial health and maintaining its mid-A credit rating. The report highlights a commitment to strategic growth initiatives and operational efficiency.
Financial Highlights
55 data points| Revenue | $53.80B |
| Cost of Revenue | $36.63B |
| Gross Profit | $17.17B |
| R&D Expenses | $1.69B |
| SG&A Expenses | $5.16B |
| Operating Expenses | $45.51B |
| Operating Income | $8.29B |
| Net Income | $6.09B |
| EPS (Basic) | $10.85 |
| EPS (Diluted) | $10.74 |
| Shares Outstanding (Basic) | 561.60M |
| Shares Outstanding (Diluted) | 567.50M |
Key Highlights
- 1Total sales and revenues for 2019 decreased by 2% to $53.8 billion, primarily due to lower sales volume influenced by dealer inventory adjustments, partially offset by higher end-user demand.
- 2Profit per share increased to $10.74 in 2019 from $10.26 in 2018, supported by lower SG&A and R&D expenses and improved financial products segment profit.
- 3The Machinery, Energy & Transportation (ME&T) segment saw a 2% decline in sales, with Construction Industries down 3% and Energy & Transportation down 3%, while Resource Industries was flat.
- 4Enterprise operating cash flow increased to $6.9 billion in 2019 from $6.6 billion in 2018, demonstrating strong cash generation.
- 5Caterpillar repurchased $4.05 billion of its common stock in 2019 and maintained a healthy cash position of $8.3 billion.
- 6The Financial Products segment reported a 5% increase in revenues and a significant 44% increase in profit, driven by lower credit loss provisions and higher average financing rates.