10-QPeriod: Q1 FY2023

CATERPILLAR INC Quarterly Report for Q1 Ended Mar 31, 2023

Filed May 3, 2023For Securities:CAT

Summary

Caterpillar Inc. (CAT) reported strong financial results for the first quarter of 2023, with total sales and revenues increasing by 17% year-over-year to $15.86 billion. This growth was driven by favorable price realization and higher sales volumes across all three primary segments: Construction Industries, Resource Industries, and Energy & Transportation. Profit per share also saw a significant increase to $3.74 from $2.86 in the prior year quarter. The company maintained a robust liquidity position, ending the quarter with $6.8 billion in enterprise cash and positive operating cash flow of $1.57 billion. A notable event impacting the quarter's results was the divestiture of the Longwall business, which resulted in a significant pre-tax loss primarily due to foreign currency translation adjustments. However, excluding this and other restructuring costs, adjusted profit per share was $4.91, highlighting the underlying strength of the company's core operations. The company anticipates continued top-line growth for the full year 2023, supported by improving supply chain dynamics and a strong backlog.

Financial Highlights

52 data points
Beta

Revenue

$15.86B

36.3% Gross Margin

Net Income

$1.94B

12.2% Net Margin

EPS (Diluted)

$3.74

Total Assets

$83.65B

Cash & Equivalents

$6.80B

Free Cash Flow

$1.15B

Financial Statements
Beta
Revenue$15.86B
Cost of Revenue$10.10B
Gross Profit$5.76B
R&D Expenses$472.00M
SG&A Expenses$1.46B
Operating Expenses$13.13B
Operating Income$2.73B
Net Income$1.94B
EPS (Basic)$3.76
EPS (Diluted)$3.74
Shares Outstanding (Basic)516.20M
Shares Outstanding (Diluted)519.40M

Key Highlights

  • 1Total sales and revenues increased by 17% to $15.86 billion, driven by price realization and higher sales volume.
  • 2Profit per share rose to $3.74, up from $2.86 in the prior year quarter.
  • 3Operating profit margin improved significantly to 17.2% from 13.7% in the prior year quarter.
  • 4Enterprise cash stood at $6.8 billion, with positive operating cash flow of $1.57 billion for the quarter.
  • 5The divestiture of the Longwall business resulted in a significant pre-tax loss but the core operations showed strength with adjusted profit per share of $4.91.
  • 6Strong demand is anticipated across key end markets, including construction, resource industries, and energy & transportation for the remainder of 2023.
  • 7Dealer inventories increased by $1.4 billion during the quarter, indicating continued demand and potential for future sales.

Frequently Asked Questions

Caterpillar's revenue growth in the first quarter of 2023 was primarily driven by favorable price realization and higher sales volumes across its key segments, particularly Construction Industries, Resource Industries, and Energy & Transportation. These factors led to a 17% year-over-year increase in total sales and revenues.

The divestiture of the Longwall business, which closed in February 2023, resulted in a pre-tax loss of $586 million, primarily due to foreign currency translation. While this negatively impacted reported profit, the company's adjusted profit per share, excluding this and other restructuring costs, was $4.91, demonstrating the resilience of its ongoing operations.

Caterpillar anticipates continued strong performance across its segments. In Construction Industries, North America shows positive momentum, while Asia Pacific (excluding China) is expected to grow. Resource Industries is expected to benefit from continued healthy mining demand. Energy & Transportation is projected to follow normal seasonal patterns with stronger sales in the second half of the year, supported by robust demand in Oil & Gas, Power Generation, and Industrial applications.

Caterpillar maintains a strong liquidity position, ending the quarter with $6.8 billion in enterprise cash and generating $1.57 billion in operating cash flow. The company prioritizes maintaining a strong financial position to support its credit ratings, funding operational requirements, investing in strategic growth initiatives, and returning capital to shareholders through dividends and share repurchases.