10-QPeriod: Q3 FY2021

CATERPILLAR INC Quarterly Report for Q3 Ended Sep 30, 2021

Filed November 3, 2021For Securities:CAT

Summary

Caterpillar Inc. (CAT) reported robust financial results for the third quarter and the first nine months of 2021, showcasing a significant recovery and growth compared to the same periods in 2020. Total sales and revenues saw a substantial increase, driven by higher end-user demand for equipment and services across all primary segments, coupled with favorable price realization. The company also benefited from dealers adjusting their inventory levels, though the pace of inventory reduction slowed in the third quarter of 2021 compared to the prior year. Profitability also saw a marked improvement, with operating profit and profit per share increasing significantly. This was attributed to higher sales volumes, favorable pricing, and improved operational efficiencies, partially offset by increased manufacturing costs, selling, general, and administrative expenses, and research and development investments. The company's proactive management of supply chain disruptions and strategic pricing actions helped mitigate some of these cost pressures. Caterpillar ended the period with a strong cash position, underscoring its financial resilience and operational effectiveness amidst evolving global business conditions.

Financial Highlights

53 data points
Beta

Revenue

$12.40B

30.5% Gross Margin

Net Income

$1.43B

11.5% Net Margin

EPS (Diluted)

$2.60

Total Assets

$80.78B

Cash & Equivalents

$9.45B

Free Cash Flow

$1.49B

Financial Statements
Beta
Revenue$12.40B
Cost of Revenue$8.62B
Gross Profit$3.78B
R&D Expenses$427.00M
SG&A Expenses$1.34B
Operating Expenses$10.73B
Operating Income$1.66B
Net Income$1.43B
EPS (Basic)$2.62
EPS (Diluted)$2.60
Shares Outstanding (Basic)544.00M
Shares Outstanding (Diluted)547.60M

Key Highlights

  • 1Total sales and revenues increased by 25% to $12.397 billion in Q3 2021 compared to Q3 2020, and by 22% to $37.173 billion for the nine months ended September 30, 2021, driven by higher demand and price realization.
  • 2Operating profit margin improved to 13.4% in Q3 2021 (from 10.0% in Q3 2020) and 14.2% for the nine months ended September 30, 2021 (from 10.4% in the prior year period).
  • 3Profit per share for Q3 2021 was $2.60, a significant increase from $1.22 in Q3 2020. For the nine months, profit per share was $7.94, up from $4.05 in the prior year.
  • 4Enterprise operating cash flow was strong at $5.8 billion for the first nine months of 2021.
  • 5Caterpillar ended Q3 2021 with $9.4 billion in enterprise cash, maintaining a solid liquidity position.
  • 6Sales and revenues increased across all three primary segments (Construction Industries, Resource Industries, and Energy & Transportation), reflecting broad-based demand recovery.
  • 7The company is actively managing supply chain disruptions and associated cost increases through proactive measures and strategic pricing.

Frequently Asked Questions

The substantial increase in sales and revenues was primarily driven by higher end-user demand for equipment and services across all segments. Favorable price realization and changes in dealer inventory levels, where dealers reduced their inventory at a slower pace compared to the prior year, also contributed positively to the revenue growth.

Caterpillar demonstrated improved profitability. Operating profit margins expanded in both the third quarter and the nine-month period of 2021 compared to 2020, reflecting higher sales volumes, favorable pricing, and improved operational efficiencies. This led to a significant increase in profit per share for both periods.

Caterpillar is navigating supply chain disruptions, including component shortages, transportation delays, and rising material costs. The company is mitigating these challenges through proactive measures such as redirecting components, altering assembly processes, and implementing strategic price actions to offset rising costs. These efforts are aimed at meeting increasing customer demand despite the complex operating environment.

Caterpillar maintains a strong financial and liquidity position. The company ended the third quarter of 2021 with $9.4 billion in enterprise cash and generated $5.8 billion in enterprise operating cash flow for the first nine months of the year, indicating robust financial health and the ability to fund operations and strategic initiatives.