Caterpillar Inc. (NYSE:CAT)

The financial data reveals several notable trends over the five-year period under review. Sales of Machinery, Energy & Transportation exhibited a steady increase from 39,022 million US dollars in 2020 to a peak of 63,869 million US dollars in 2023, followed by a slight decline to 61,363 million US dollars in 2024. Despite this dip, the overall growth in sales remained significant across the period.

Cost of goods sold followed a generally rising trend from -29,082 million US dollars in 2020 to -42,767 million in 2023, before decreasing to -40,199 million in 2024. This pattern indicates improved cost management or changes in input pricing contributing to reduced costs in the last year. Consequently, gross margin increased substantially from 9,940 million US dollars in 2020 to 21,164 million in 2024, with a pronounced jump between 2022 and 2023, reflecting enhanced profitability from core operations.

Revenues of Financial Products showed continual growth, rising from 2,726 million US dollars in 2020 to 3,446 million US dollars in 2024. However, the interest expense related to Financial Products increased markedly in 2023 and 2024, reaching -1,286 million US dollars, which may have adversely impacted net income from these activities.

Selling, general and administrative expenses steadily increased from -4,642 million US dollars in 2020 to -6,667 million in 2024, signifying rising operational expenditures that accompanied revenue growth. Research and development expenses also displayed an upward trend, growing from -1,415 million US dollars to around -2,100 million, indicating sustained investment in innovation.

A goodwill impairment charge of -925 million US dollars appeared in 2022, representing an unusual one-time expense not repeated in other years, which likely contributed to a flattening of operating profit growth that year. Other operating income and expenses fluctuated, with notable increases in negative impact during 2023 at -1,818 million US dollars before improving slightly in 2024.

Operating profit doubled from 4,553 million US dollars in 2020 to approximately 13,000 million in 2023 and 2024, demonstrating strong operational performance and effective leverage of increased revenue despite rising expenses. Interest expense excluding Financial Products remained relatively stable around -500 million US dollars annually, while investment and interest income saw a marked increase from 112 million US dollars in 2020 to nearly 500 million in 2023 and 2024, positively contributing to earnings.

Foreign exchange gains and losses fluctuated without a clear trend, with modest losses in some years and gains in others. Miscellaneous income and other income activities showed high volatility, with a substantial increase in other income in 2021 and 2022, followed by declines later.

Consolidated profit before taxes increased steadily, more than tripling from 3,995 million US dollars in 2020 to 13,373 million in 2024, supported by higher operating profits and other income components. Provision for income taxes rose correspondingly but at a somewhat slower pace, resulting in growing net profits.

Profit attributable to common stockholders expanded significantly from 2,998 million US dollars in 2020 to 10,792 million in 2024, reflecting the overall expansion in profitable operations and improved financial management. Noncontrolling interests remained negligible throughout the period.

Summary of Trends

Strong revenue growth in core machinery and related segments up to 2023 with slight decline in 2024.

Improved gross margins driven by controlled costs despite rising expenses in administration and R&D.

Significant increase in operating profit and consolidated profits, highlighting enhanced operational efficiency and profitability.

Volatile but generally positive impact from financial products and other income sources, with increasing interest expenses associated with financial products in recent years.

One-time goodwill impairment negatively affecting 2022 results but not recurring thereafter.

Consistent increase in profit attributable to common stockholders indicating strong shareholder value creation.