Caterpillar (CAT) Q4 2022 earnings summary

Executive summary

• FY22 sales and revenues rose 17% to $59.427B; adjusted profit per share reached a record $13.84, while reported profit per share was $12.64.

• Strong Machinery, Energy & Transportation free cash flow of $5.777B supported $6.7B returned to shareholders through dividends and repurchases.

• Results advanced despite supply-chain constraints, inflationary input costs and unfavorable currency effects; growth came from favorable pricing, higher volume and services.

Financial highlights

• Sales and revenues were $59.427B, up $8.456B or 17% YoY; price realization added $5.179B and volume added $4.660B, partly offset by $1.453B of currency impact.

• Operating profit rose 15% to $7.904B; reported operating margin was 13.3% versus 13.5%, while adjusted margin increased to 15.4% from 13.7%.

• Net profit was $6.705B versus $6.489B; diluted EPS was $12.64 versus $11.83, and adjusted EPS was $13.84 versus $10.81.

• Consolidated operating cash flow was $7.766B, up $568M YoY; year-end cash was $7.004B, down $2.25B from year-end 2021.

Outlook and guidance

• FY23 sales and operating profit expected to increase versus FY22; favorable price realization expected to more than offset manufacturing costs, with price realization and input-cost inflation moderating through the year.

• FY23 sales expected to follow traditional seasonality, with Q1 lowest; no significant year-end dealer inventory change anticipated despite stronger end-user equipment sales.

• FY23 SG&A/R&D growth expected to exceed lower short-term incentive compensation; pension expense in other income estimated just over $300M for the year, or about $80M quarterly.

• ME&T capital expenditures expected at around $1.5B and pension/OPEB contributions at approximately $372M in FY23.

• End-market outlook included North American construction momentum, healthy mining demand and Energy & Transportation sales growth; China excavator weakness and uncertain European conditions remain headwinds.