Last Updated: 19th November 2022

Caterpillar is a global manufacturer of construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines and diesel electric locomotives.

Employees: 107,700

Revenue: $51bn for FY2021

HQ Location: Irving, Texas, United States

Their vision and priorities:

  • Services growth is a core focus of the strategy. “We have a bold goal to double our Machinery, Energy and Transportation (ME&T) services sales to $28bn by 2026 from our 2016 baseline”

  • Expanded offerings - “we are growing our product line beyond core performance products….to reach more customers than ever before.”

  • Operational excellence - safety, quality, lean, competitive and flexible cost structure

  • Sustainability - “We are committed to further reducing Caterpillar’s greenhouse gas emissions while helping our customers meet their climate-related objectives”

  • Our goal - Profitable Growth. Profitable Growth is our clear definition of winning. It allows us to invest in future products and services and in our people. Higher profits mean more money to invest in our company, improve our position as a global leader.

What they do:

  • Manufacturer of machinery - across five product lines

  • 4m+ Cat products at work around the world

  • 62% of sales and revenues outside of United States

  • 160 dealers in Cat Dealer Network serving 193 countries

Three things to know right now

A Dividend Aristocrat

Caterpillar are proud that they continue to deliver a dividend to investors - a trend that has continued since the company was formed.

In FY2021 they returned $5bn to shareholders.

The company has paid higher annual dividends for 29 consecutive years and is recognised as a member of the S&P 500 Dividend Aristocrat Index.

Jim Umpleby to remain as CEO

In October 2022 it was announced that Caterpillar was waiving their policy that their Chairman and CEO would have to retire aged 65.

“Waiving the mandatory retirement policy for Jim provides the Board greater flexibility with its CEO succession process,” said Debra Reed-Klages, presiding director, speaking on behalf of Caterpillar’s Board of Directors. “Jim has provided strong strategic and operating leadership for the company, and we look forward to his continued leadership of the Caterpillar team.”

Prototype battery powered machines

Caterpillar is demonstrating prototype versions of battery powered machines.

To help support the companies sustainability objectives they are focused on delivering products that reduce the carbon impact during their usage on jobsites.

What does each business unit do?

Construction Industries

Helping customers to build what the world needs.

Products for building roads and the built environment. Diggers, cranes, demolition equipment and products for government and defence customers.

Approx 40% of sales.

Resource Industries

Making it possible for customers to profitably mine and harvest natural resources.

Products including agriculture and mining equipment, and solutions for forestry and transporting materials.

Approx 20% of sales.

Energy and Transportation

Delivering solutions for customer’s growing energy and transportation needs.

Products including industrial power, marine engines, rail locomotives.

Approx 40% of sales.

Their financial calendar

Q1: January-March - Earnings 27th April

Q2: April-June - Earnings 1st August

Q3: July-September - Earnings 31st October

Q4: September-December - Earnings 31st January

Positives from the last earnings report:

  • Sales and revenues up 21% to $15bn

  • Operating Profit up 46% and Operating Profit Margin at 16.2%

  • $2bn returned to shareholders as dividends

Challenges from the last earnings report:

  • Unfavourable manufacturing costs reflected higher material costs, freight and manufacturing inefficiencies.

  • Higher Sales, General and Administration (S,G&A) and R&D costs

  • Restructuring expense expected to be up to $800m for the full year

Next Earnings Report:

31st January 2023

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