01—Abstract
Summary
Summary of the 10-K filed February 15, 2023. Cited figures are marked; the original filing is the authoritative source.
Caterpillar Inc. (CAT) reported strong sales and revenue growth for the fiscal year 2022, reaching $59.427 billiona, a 17% increase over 2021, driven by favorable price realization and higher sales volumes across its Construction Industries, Resource Industries, and Energy & Transportation segments.
Despite increased manufacturing costs and SG&A expenses, the company maintained a healthy operating profit margin of 13.3%. A significant event was a $925 millionb goodwill impairment charge related to the Rail division, impacting the overall profit per share. However, adjusted profit per share saw a notable increase, reflecting underlying operational strength.
The company's outlook for 2023 remains positive, with expectations for continued sales growth driven by strong order backlogs and improving supply chain dynamics. Caterpillar is strategically investing in services, digital technologies, electrification, and autonomy to fuel long-term profitable growth.
The company's robust operating cash flow and substantial liquidity position underscore its financial stability, enabling continued returns to shareholders through dividends and share repurchases, while maintaining a mid-A credit rating. Investors should monitor commodity price trends and global economic conditions, as these remain key factors influencing demand for Caterpillar's products.
02—Key points
Key Highlights
- Total sales and revenues increased by 17% to $59.427 billion in 2022, up from $50.971 billion in 2021.
- Operating profit increased by 15% to $7.904 billion, with an operating profit margin of 13.3%.
- Profit per share was $12.64 in 2022, compared to $11.83 in 2021. Adjusted profit per share was $13.84 in 2022, up from $10.81 in 2021.
- A goodwill impairment charge of $925 million was recorded for the Rail reporting unit.
- Enterprise operating cash flow was $7.8 billion in 2022.
- The order backlog increased to approximately $30.4 billion at December 31, 2022, up from $23.1 billion at December 31, 2021.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, Caterpillar Inc kept $0.11.
- Revenue$59.43B100.0%
- Cost of revenue−$41.35B69.6%
- Gross profit$18.08B30.4%
- Operating costs−$10.17B17.1%
- Operating income$7.90B13.3%
- Interest, other & tax−$1.20B2.0%
- Net income$6.71B11.3%
Where FY2022 revenue went
$59.43B- Cost of revenue: $41.35B, 70% of revenue
- Net income: $6.71B, 11% of revenue
- R&D: $1.81B, 3.1% of revenue
- SG&A: $5.65B, 9.5% of revenue
- Other operating costs: $2.71B, 4.6% of revenue
- Interest, other & tax: $1.20B, 2.0% of revenue
Kept 11% as net incomeNet income $6.71B · 11%Interest, other & tax $1.20B · 2.0%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed February 15, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $59.43B$50.97B | +16.6% |
| Cost of Revenue | $41.35B$35.51B | +16.4% |
| Gross Profit | $18.08B$15.46B | +16.9% |
| R&D Expenses | $1.81B$1.69B | +7.6% |
| SG&A Expenses | $5.65B$5.37B | +5.3% |
| Operating Expenses | $51.52B$44.09B | +16.9% |
| Operating Income | $7.90B$6.88B | +14.9% |
| Net Income | $6.71B$6.49B | +3.3% |
| EPS (Basic) | $12.72$11.93 | +6.6% |
| EPS (Diluted) | $12.64$11.83 | +6.8% |
| Shares Outstanding (Basic) | 526.90M544.00M | −3.1% |
| Shares Outstanding (Diluted) | 530.40M548.50M | −3.3% |
05—Questions
Frequently Asked Questions
What were the key drivers of Caterpillar's sales growth in 2022?
Caterpillar's sales growth in 2022 was primarily driven by favorable price realization and higher sales volume across its Construction Industries, Resource Industries, and Energy & Transportation segments. Changes in dealer inventories and increased services also contributed to the rise in sales volume.
What is the impact of the goodwill impairment charge on Caterpillar's financial results?
Caterpillar recorded a goodwill impairment charge of $925 million in 2022, specifically related to the Rail division, due to a lower outlook for its locomotive offerings. This charge negatively impacted reported profit per share but was excluded from the calculation of adjusted profit per share.
What is Caterpillar's outlook for 2023?
Caterpillar expects sales to increase in 2023 compared to 2022, driven by favorable price realization and strong order backlogs, alongside improving supply chain dynamics. The company anticipates continued momentum in services and strategic investments in technology and new offerings.
How is Caterpillar managing its financial products segment?
The Financial Products segment, primarily managed by Cat Financial, provides financing and insurance to customers and dealers. While revenues increased slightly, segment profit decreased by 5% due to an unfavorable impact from equity securities in Insurance Services. Cat Financial maintained healthy financial ratios and managed its risks through a match-funding policy and derivative instruments.
06—Continue