10-QPeriod: Q1 FY2024

CATERPILLAR INC Quarterly Report for Q1 Ended Mar 31, 2024

Filed May 1, 2024For Securities:CAT

Summary

Caterpillar Inc. reported stable total sales and revenues of $15.799 billion for the first quarter of 2024, nearly flat compared to the prior year's $15.862 billion. Despite a slight dip in overall revenue, the company demonstrated improved profitability, with operating profit increasing by 29% to $3.519 billion and profit per share rising to $5.75, up from $3.74 in the first quarter of 2023. This performance was driven by strong price realization and higher revenues from the Financial Products segment, which more than offset a decrease in sales volume, particularly in Construction Industries and Resource Industries. The company maintained a healthy financial position, ending the quarter with $5.0 billion in enterprise cash and generating $2.1 billion in operating cash flow. Management expects continued healthy demand across most end markets for 2024, with a positive outlook for Energy & Transportation driven by data center growth, while Construction Industries and Resource Industries anticipate slight decreases in sales volume compared to strong 2023 performance. Caterpillar continues to invest strategically in areas like services, autonomy, and electrification to drive long-term profitable growth.

Financial Highlights

52 data points
Beta

Revenue

$15.80B

38.8% Gross Margin

Net Income

$2.86B

18.1% Net Margin

EPS (Diluted)

$5.75

Total Assets

$83.74B

Cash & Equivalents

$4.96B

Free Cash Flow

$1.55B

Financial Statements
Beta
Revenue$15.80B
Cost of Revenue$9.66B
Gross Profit$6.14B
R&D Expenses$520.00M
SG&A Expenses$1.58B
Operating Expenses$12.28B
Operating Income$3.52B
Net Income$2.86B
EPS (Basic)$5.78
EPS (Diluted)$5.75
Shares Outstanding (Basic)493.90M
Shares Outstanding (Diluted)496.90M

Key Highlights

  • 1Total sales and revenues remained stable at $15.799 billion, a slight decrease of 0.4% year-over-year.
  • 2Operating profit increased significantly by 29% to $3.519 billion, with the operating profit margin improving to 22.3% from 17.2% in the prior year.
  • 3Profit per share grew to $5.75 from $3.74 in the first quarter of 2023, reflecting improved profitability.
  • 4The Financial Products segment saw a 10% increase in revenues to $991 million.
  • 5Energy & Transportation segment sales increased by 7% to $6.681 billion, driven by strong performance in Oil & Gas and Power Generation.
  • 6Enterprise cash stood at $5.0 billion at the end of the quarter, with operating cash flow of $2.1 billion.
  • 7The company anticipates continued healthy demand across most end markets for the full year 2024.

Frequently Asked Questions

The substantial increase in operating profit was primarily driven by favorable price realization, which added $575 million to profitability. Additionally, the absence of restructuring costs associated with the 2023 Longwall divestiture, which negatively impacted the prior year's results, also contributed significantly to the year-over-year improvement. Higher revenues from the Financial Products segment and improved performance in Energy & Transportation also played a role.

Total dealer inventory increased by $1.4 billion during the first quarter of 2024, consistent with the increase in the prior year. Caterpillar expects no significant change in machine dealer inventories for the full year 2024, compared to a $0.7 billion increase in 2023. For the second quarter of 2024, an unfavorable impact from changes in machine dealer inventories is anticipated as inventories are expected to decline.

Caterpillar expects continued healthy demand across most end markets. In Construction Industries, North America is anticipated to remain strong, while Europe may see softening. Resource Industries is expected to experience lower sales volume compared to 2023, with customers showing capital discipline, but the long-term outlook remains positive due to the energy transition. Energy & Transportation is projected to be about flat to higher, particularly driven by demand for data centers in Power Generation and continued activity in Oil & Gas.

Caterpillar's long-term cash deployment strategy prioritizes maintaining a strong financial position to support its credit rating, funding operational requirements, and then returning capital to shareholders through dividends and share repurchases. The company repurchased $4.46 billion of stock in the first three months of 2024 and maintained its quarterly dividend. They aim to return substantially all ME&T free cash flow to shareholders over time while preserving their credit rating.