10-QPeriod: Q1 FY2022

CATERPILLAR INC Quarterly Report for Q1 Ended Mar 31, 2022

Filed May 4, 2022For Securities:CAT

Summary

Caterpillar Inc. (CAT) reported solid financial results for the first quarter of 2022, with total sales and revenues increasing by 14% to $13.589 billion compared to the prior year period. This growth was primarily driven by higher sales volume across all three main segments and favorable price realization, reflecting strong end-user demand and an increase in dealer inventories. Despite rising material and freight costs, the company managed to maintain its profitability, with profit per share at $2.86 (diluted $2.77), a slight increase from the previous year. While the company experienced some unfavorable currency impacts and increased operating costs, particularly in manufacturing and SG&A/R&D expenses, these were largely offset by pricing power and volume growth. Caterpillar's robust demand is further evidenced by a healthy order backlog of approximately $26.5 billion. The company continues to focus on managing supply chain disruptions and inflationary pressures through appropriate pricing actions, aiming to sustain profitable growth and return capital to shareholders.

Financial Highlights

52 data points
Beta

Revenue

$13.59B

29.7% Gross Margin

Net Income

$1.54B

11.3% Net Margin

EPS (Diluted)

$2.86

Total Assets

$82.28B

Cash & Equivalents

$6.53B

Free Cash Flow

-$33.00M

Financial Statements
Beta
Revenue$13.59B
Cost of Revenue$9.56B
Gross Profit$4.03B
R&D Expenses$457.00M
SG&A Expenses$1.35B
Operating Expenses$11.73B
Operating Income$1.85B
Net Income$1.54B
EPS (Basic)$2.88
EPS (Diluted)$2.86
Shares Outstanding (Basic)534.50M
Shares Outstanding (Diluted)538.30M

Key Highlights

  • 1Total sales and revenues increased by 14% to $13.589 billion in Q1 2022, driven by higher sales volume and favorable price realization.
  • 2Profit per share was $2.86 ($2.77 diluted) for Q1 2022, a slight increase from $2.77 ($2.77 diluted) in Q1 2021.
  • 3Operating profit margin slightly decreased to 13.7% from 15.3% year-over-year, impacted by higher manufacturing and SG&A/R&D costs.
  • 4Dealers increased inventories by $1.3 billion in Q1 2022, compared to $700 million in Q1 2021, indicating strong confidence in future demand.
  • 5The order backlog stood at approximately $26.5 billion at the end of Q1 2022, an increase of $3.4 billion from Q4 2021.
  • 6Enterprise operating cash flow was $0.3 billion in Q1 2022, with the company ending the quarter with $6.5 billion in cash.
  • 7The company is actively managing supply chain disruptions and inflationary pressures, taking appropriate pricing actions.

Frequently Asked Questions

The primary drivers for Caterpillar's sales growth in Q1 2022 were higher sales volume across its three main segments and favorable price realization. This was supported by strong end-user demand for equipment and services, as well as an increase in dealer inventories, indicating confidence in future market conditions.

While Caterpillar faced unfavorable manufacturing costs due to higher material and freight expenses, and increased SG&A/R&D investments, these were largely offset by favorable price realization and higher sales volume. This allowed the company to maintain its profitability, with profit per share showing a slight increase compared to the prior year.

Caterpillar is actively monitoring global supply chain disruptions and inflationary pressures. The company is implementing appropriate pricing actions in response to rising costs and is developing contingency plans to mitigate supply chain challenges and meet increasing customer demand. The outlook remains fluid, with continuous assessment of evolving conditions.

Caterpillar maintains a strong financial position, with $6.5 billion in cash at the end of Q1 2022. Its capital allocation strategy prioritizes maintaining a strong financial position to support a mid-A credit rating. The company also focuses on funding operational requirements, strategic growth initiatives, and returning capital to shareholders through dividends and share repurchases. Approximately $1.4 billion remained under its share repurchase authorization as of March 31, 2022.