10-QPeriod: Q3 FY2023

CATERPILLAR INC Quarterly Report for Q3 Ended Sep 30, 2023

Filed November 1, 2023For Securities:CAT

Summary

Caterpillar Inc. reported a strong third quarter and a robust first nine months of 2023, driven by significant increases in sales and revenues across its primary segments. Total sales and revenues for the third quarter rose 12% year-over-year to $16.81 billion, with operating profit increasing by 42% to $3.45 billion, resulting in a profit per share of $5.45. This performance was largely attributed to favorable price realization and higher sales volumes, particularly in the Construction Industries and Energy & Transportation segments. For the first nine months, total sales and revenues reached $49.99 billion, up 17%, with operating profit surging 58% to $9.83 billion, translating to a profit per share of $14.85. The company highlights improving supply chain conditions, a strong backlog, and healthy demand across most end markets as key drivers for its positive outlook, projecting continued strength into 2024. Caterpillar also reported strong operating cash flow of $8.88 billion for the nine-month period, underscoring its solid financial health.

Financial Highlights

53 data points
Beta

Revenue

$16.81B

37.0% Gross Margin

Net Income

$2.79B

16.6% Net Margin

EPS (Diluted)

$5.45

Total Assets

$86.79B

Cash & Equivalents

$6.56B

Free Cash Flow

$3.68B

Financial Statements
Beta
Revenue$16.81B
Cost of Revenue$10.58B
Gross Profit$6.23B
R&D Expenses$554.00M
SG&A Expenses$1.62B
Operating Expenses$13.36B
Operating Income$3.45B
Net Income$2.79B
EPS (Basic)$5.48
EPS (Diluted)$5.45
Shares Outstanding (Basic)509.80M
Shares Outstanding (Diluted)512.60M

Key Highlights

  • 1Total sales and revenues increased by 12% to $16.81 billion in Q3 2023 compared to Q3 2022.
  • 2Operating profit rose by 42% to $3.45 billion in Q3 2023, with operating profit margin improving to 20.5% from 16.2% in the prior year.
  • 3Profit per share increased to $5.45 in Q3 2023, up from $3.87 in Q3 2022.
  • 4For the first nine months of 2023, sales and revenues grew 17% to $49.99 billion, and operating profit increased 58% to $9.83 billion.
  • 5Nine-month profit per share was $14.85, up from $9.85 in the same period last year.
  • 6Enterprise operating cash flow for the first nine months of 2023 was $8.88 billion.
  • 7The company maintains a positive outlook for the remainder of 2023 and for 2024, citing strong backlog and healthy demand.

Frequently Asked Questions

Caterpillar's revenue growth in the third quarter of 2023 was primarily driven by favorable price realization and higher sales volumes across its key segments, particularly Construction Industries and Energy & Transportation. Improved sales of equipment to end users also contributed significantly, partially offset by changes in dealer inventories.

Profitability saw a substantial improvement, with operating profit increasing by 42% to $3.45 billion and the operating profit margin expanding to 20.5% from 16.2% in the third quarter of 2022. This increase was mainly due to favorable price realization and higher sales volumes, despite increased SG&A/R&D expenses and manufacturing costs.

Caterpillar anticipates continued strength for the remainder of 2023 and into 2024. The company expects slightly higher sales and revenues in the fourth quarter of 2023 compared to the prior year, driven by favorable price realization and sales of equipment to end users. The overall outlook remains positive due to an improving supply chain, a strong backlog, and healthy demand across most end markets.

Caterpillar generated $8.88 billion in operating cash flow for the first nine months of 2023, demonstrating strong liquidity. The company's capital deployment strategy prioritizes maintaining a strong financial position, funding operational requirements, investing in strategic growth initiatives, and returning capital to shareholders through dividends and share repurchases. As of September 30, 2023, Caterpillar had $6.56 billion in cash, cash equivalents, and restricted cash.