Analysis of Profitability Ratios
Quarterly Data
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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Profitability Ratios (Summary)
Caterpillar Inc., profitability ratios (quarterly data)
Based on: 10-Q (reporting date: 2026-06-30), 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
The financial performance over the analyzed period is characterized by a significant expansion in profitability margins from 2022 through early 2024, followed by a period of moderate contraction and a subsequent recovery phase starting in 2026.
- Profit Margin Analysis
- Gross profit margin experienced a steady ascent from 25.71% in March 2022 to a peak of 34.49% by December 2024. A subsequent downward trend occurred throughout 2025, reaching a low of 29.79% in March 2026 before rebounding to 30.87% in June 2026. Operating and net profit margins followed a closely correlated trajectory; operating margins reached a peak of 21.58% in March 2024, while net margins peaked at 17.65% during the same month. Both metrics experienced a contraction throughout 2025, with a notable recovery observed by the second quarter of 2026.
- Return on Equity and Assets
- Return on Equity (ROE) exhibited substantial growth and volatility, climbing from 38.07% in March 2022 to a peak of 64.26% in June 2023. Despite periodic fluctuations, ROE remained above 50% for the majority of 2024 and early 2025, before declining to 41.67% in December 2025 and recovering to 55.91% by June 2026. Return on Assets (ROA) mirrored this pattern, peaking at 13.43% in March 2024 and ending the period at 10.57% in June 2026, indicating a general alignment between asset utilization and overall net profitability.
- Operational Efficiency and Trends
- The synchronized movement of gross, operating, and net margins suggests that the growth phase was driven by fundamental improvements in production efficiency and pricing power. The subsequent decline across all profitability ratios during 2025 points to a period of increased operational costs or pricing pressure. However, the upward movement in the first half of 2026 indicates a successful stabilization of margins and a return to higher capital efficiency.
Return on Sales
Return on Investment
Gross Profit Margin
Caterpillar Inc., gross profit margin calculation (quarterly data)
| Jun 30, 2026 | Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Gross margin | ||||||||||||||||||||||||
| Sales of Machinery, Power & Energy | ||||||||||||||||||||||||
| Profitability Ratio | ||||||||||||||||||||||||
| Gross profit margin1 | ||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||
| Gross Profit Margin, Competitors2 | ||||||||||||||||||||||||
| Boeing Co. | ||||||||||||||||||||||||
| Eaton Corp. plc | ||||||||||||||||||||||||
| GE Aerospace | ||||||||||||||||||||||||
| Honeywell International Inc. | ||||||||||||||||||||||||
| Lockheed Martin Corp. | ||||||||||||||||||||||||
| RTX Corp. | ||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2026-06-30), 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
1 Q2 2026 Calculation
Gross profit margin = 100
× (Gross marginQ2 2026
+ Gross marginQ1 2026
+ Gross marginQ4 2025
+ Gross marginQ3 2025)
÷ (Sales of Machinery, Power & EnergyQ2 2026
+ Sales of Machinery, Power & EnergyQ1 2026
+ Sales of Machinery, Power & EnergyQ4 2025
+ Sales of Machinery, Power & EnergyQ3 2025)
= 100 × ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
An analysis of the profitability metrics indicates a significant expansion in gross profit margins from early 2022 through late 2024, followed by a period of moderate contraction and a recent recovery. The interaction between sales volume and margin percentages suggests a transition from margin-driven growth to volume-driven growth toward the conclusion of the observed period.
- Gross Profit Margin Percentage Trends
- The gross profit margin exhibited a consistent upward trajectory, rising from 25.71% in March 2022 to a peak of 34.49% in December 2024. This phase of expansion reflects a substantial improvement in production efficiency or enhanced pricing power. Following this peak, a gradual decline was observed, with the margin contracting to 29.79% by March 2026, before showing a reversal to 30.87% in June 2026.
- Correlation Between Absolute Gross Margin and Revenue
- A divergence is noted between the margin percentage and the absolute gross margin. Although the percentage margin peaked in late 2024, the absolute gross margin reached its maximum value of 6,800 million US dollars in June 2026. This is attributed to the significant growth in Sales of Machinery, Power & Energy, which increased from 12,886 million US dollars in March 2022 to 19,581 million US dollars by June 2026.
- Operational Phase Analysis
- The data reveals two distinct operational phases. The first phase, spanning 2022 through 2024, was characterized by simultaneous growth in both sales volume and margin percentages. The second phase, encompassing 2025 and the first half of 2026, is defined by margin compression accompanied by strong revenue growth, allowing absolute profitability to continue increasing despite the lower percentage return per dollar of sales.
Operating Profit Margin
Caterpillar Inc., operating profit margin calculation (quarterly data)
| Jun 30, 2026 | Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Operating profit | ||||||||||||||||||||||||
| Sales of Machinery, Power & Energy | ||||||||||||||||||||||||
| Profitability Ratio | ||||||||||||||||||||||||
| Operating profit margin1 | ||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||
| Operating Profit Margin, Competitors2 | ||||||||||||||||||||||||
| Boeing Co. | ||||||||||||||||||||||||
| Eaton Corp. plc | ||||||||||||||||||||||||
| GE Aerospace | ||||||||||||||||||||||||
| Honeywell International Inc. | ||||||||||||||||||||||||
| Lockheed Martin Corp. | ||||||||||||||||||||||||
| RTX Corp. | ||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2026-06-30), 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
1 Q2 2026 Calculation
Operating profit margin = 100
× (Operating profitQ2 2026
+ Operating profitQ1 2026
+ Operating profitQ4 2025
+ Operating profitQ3 2025)
÷ (Sales of Machinery, Power & EnergyQ2 2026
+ Sales of Machinery, Power & EnergyQ1 2026
+ Sales of Machinery, Power & EnergyQ4 2025
+ Sales of Machinery, Power & EnergyQ3 2025)
= 100 × ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
The operating profit margin exhibits a distinct cyclical trajectory characterized by an initial period of stability, a phase of aggressive expansion, and a subsequent gradual normalization. Between March 2022 and June 2026, the margin fluctuated from a low of 13.81% to a peak of 21.58%, reflecting significant shifts in operational efficiency and profitability relative to sales.
- Margin Expansion Phase
- A period of consistent growth is observed starting in March 2023, where the operating profit margin rose from 14.94% to a peak of 21.58% by March 2024. This upward trend indicates a substantial improvement in the conversion of sales into operating profit, with the margin increasing by approximately 664 basis points over one year.
- Margin Contraction and Stabilization
- Following the peak in early 2024, a steady downward trend emerged. From June 2024 to March 2026, the margin contracted from 21.55% to 17.38%. This decline suggests an increase in operating costs or a pricing adjustment that outpaced revenue growth during this window. A slight recovery is noted in the final quarter ending June 2026, where the margin rose to 18.44%.
- Revenue and Absolute Profit Correlation
- While the operating profit margin peaked in March 2024, absolute operating profit and sales reached their highest levels at the end of the analyzed period. In June 2026, sales reached $19,581 million and operating profit reached $4,295 million. This indicates that while the efficiency of profit generation per dollar of sale decreased from its peak, the overall scale of operations expanded sufficiently to drive record absolute profitability.
In summary, the operational performance transitioned from a phase of margin optimization to a phase of volume-driven growth. The ability to maintain a margin above 17% throughout the latter half of the period suggests a higher baseline of profitability compared to the 13-14% range observed in early 2022.
Net Profit Margin
Caterpillar Inc., net profit margin calculation (quarterly data)
| Jun 30, 2026 | Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Profit attributable to common stockholders | ||||||||||||||||||||||||
| Sales of Machinery, Power & Energy | ||||||||||||||||||||||||
| Profitability Ratio | ||||||||||||||||||||||||
| Net profit margin1 | ||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||
| Net Profit Margin, Competitors2 | ||||||||||||||||||||||||
| Boeing Co. | ||||||||||||||||||||||||
| Eaton Corp. plc | ||||||||||||||||||||||||
| GE Aerospace | ||||||||||||||||||||||||
| Honeywell International Inc. | ||||||||||||||||||||||||
| Lockheed Martin Corp. | ||||||||||||||||||||||||
| RTX Corp. | ||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2026-06-30), 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
1 Q2 2026 Calculation
Net profit margin = 100
× (Profit attributable to common stockholdersQ2 2026
+ Profit attributable to common stockholdersQ1 2026
+ Profit attributable to common stockholdersQ4 2025
+ Profit attributable to common stockholdersQ3 2025)
÷ (Sales of Machinery, Power & EnergyQ2 2026
+ Sales of Machinery, Power & EnergyQ1 2026
+ Sales of Machinery, Power & EnergyQ4 2025
+ Sales of Machinery, Power & EnergyQ3 2025)
= 100 × ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
The net profit margin exhibits a cyclical trajectory over the analyzed period, characterized by a phase of significant expansion followed by a period of contraction and a subsequent recovery.
- Margin Expansion (2022-2023)
- Between March 2022 and December 2023, the net profit margin shifted from a baseline of approximately 13% to a high of 16.18%. Despite a temporary dip to 11.85% in December 2022, the overall trajectory was positive, indicating an improvement in operational efficiency or pricing power relative to the cost structure during this timeframe.
- Peak Profitability (2024)
- Maximum profitability was achieved in the first quarter of 2024, where the net profit margin peaked at 17.65%. For the majority of 2024, margins remained elevated, consistently exceeding 17% through September, representing the period of highest efficiency in converting revenue into net income for common stockholders.
- Contraction and Recent Recovery (2025-2026)
- A downward trend is observed throughout 2025, with margins contracting from 16.63% in March to a low of 13.89% by December. This contraction occurred even as sales of machinery, power, and energy increased toward the end of the year, suggesting that expenses grew at a faster rate than revenue. A reversal is evident in the first half of 2026, with the margin recovering to 15.28% by June 2026.
The relationship between revenue and net income reveals that while margins peaked in 2024, the highest absolute profit attributable to common stockholders was realized in June 2026, reaching 3,593 million US dollars. This indicates that substantial growth in total sales volume effectively offset the lower profit margins compared to the 2024 peak.
Return on Equity (ROE)
Caterpillar Inc., ROE calculation (quarterly data)
| Jun 30, 2026 | Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Profit attributable to common stockholders | ||||||||||||||||||||||||
| Shareholders’ equity attributable to common shareholders | ||||||||||||||||||||||||
| Profitability Ratio | ||||||||||||||||||||||||
| ROE1 | ||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||
| ROE, Competitors2 | ||||||||||||||||||||||||
| Boeing Co. | ||||||||||||||||||||||||
| Eaton Corp. plc | ||||||||||||||||||||||||
| GE Aerospace | ||||||||||||||||||||||||
| Honeywell International Inc. | ||||||||||||||||||||||||
| Lockheed Martin Corp. | ||||||||||||||||||||||||
| RTX Corp. | ||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2026-06-30), 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
1 Q2 2026 Calculation
ROE = 100
× (Profit attributable to common stockholdersQ2 2026
+ Profit attributable to common stockholdersQ1 2026
+ Profit attributable to common stockholdersQ4 2025
+ Profit attributable to common stockholdersQ3 2025)
÷ Shareholders’ equity attributable to common shareholders
= 100 × ( + + + )
÷ =
2 Click competitor name to see calculations.
The analysis of profitability ratios over the period from March 2022 to June 2026 reveals a volatile but generally upward trajectory in Return on Equity (ROE), characterized by a significant peak in early 2024 followed by a correction and a subsequent recovery.
- Growth and Peak Phase (March 2022 – June 2024)
- An aggressive expansion in ROE is observed during this window, rising from 38.07% in March 2022 to a peak of 64.26% by June 2024. This growth was primarily supported by a substantial increase in profit attributable to common stockholders, which climbed from 1,537 million USD to a range between 2,600 and 2,900 million USD. The efficiency of equity utilization reached its zenith in the first half of 2024, where the highest recorded ROE values occurred.
- Contraction and Normalization (September 2024 – December 2025)
- A downward trend in ROE emerged in the latter half of 2024 and continued throughout 2025, with the ratio declining from 55.04% in September 2024 to a period low of 41.67% by December 2025. This compression is attributed to a simultaneous increase in shareholders' equity, which peaked at 21,318 million USD in December 2025, coupled with a moderation in quarterly profits that dipped to 2,003 million USD in March 2025.
- Recovery Trend (March 2026 – June 2026)
- A strong recovery in profitability is evident in the first half of 2026. ROE rebounded from 50.53% in March 2026 to 55.91% by June 2026. This reversal was driven by a sharp increase in quarterly profit, which reached 3,593 million USD in June 2026, the highest absolute profit value in the analyzed dataset, while shareholders' equity remained relatively stable at 19,395 million USD.
Return on Assets (ROA)
Caterpillar Inc., ROA calculation (quarterly data)
| Jun 30, 2026 | Mar 31, 2026 | Dec 31, 2025 | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Profit attributable to common stockholders | ||||||||||||||||||||||||
| Total assets | ||||||||||||||||||||||||
| Profitability Ratio | ||||||||||||||||||||||||
| ROA1 | ||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||
| ROA, Competitors2 | ||||||||||||||||||||||||
| Boeing Co. | ||||||||||||||||||||||||
| Eaton Corp. plc | ||||||||||||||||||||||||
| GE Aerospace | ||||||||||||||||||||||||
| Honeywell International Inc. | ||||||||||||||||||||||||
| Lockheed Martin Corp. | ||||||||||||||||||||||||
| RTX Corp. | ||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2026-06-30), 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
1 Q2 2026 Calculation
ROA = 100
× (Profit attributable to common stockholdersQ2 2026
+ Profit attributable to common stockholdersQ1 2026
+ Profit attributable to common stockholdersQ4 2025
+ Profit attributable to common stockholdersQ3 2025)
÷ Total assets
= 100 × ( + + + )
÷ =
2 Click competitor name to see calculations.
The analysis of profitability ratios reveals a fluctuating trend in asset utilization efficiency over the observed period. An initial phase of efficiency gains was followed by a period of asset expansion that temporarily diluted returns, ending with a strong recovery in profitability.
- Return on Assets (ROA) Trends
- A sustained upward trajectory is observed from March 2022, where ROA stood at 7.90%, peaking at 13.43% in March 2024. This period indicates a high rate of profit generation relative to the asset base. Subsequently, a contraction phase occurred between March 2024 and December 2025, during which the ratio declined to a low of 9.01%. The period concludes with a recovery, as ROA rose to 10.57% by June 2026.
- Relationship Between Assets and Profitability
- The decline in ROA during 2024 and 2025 is closely linked to a significant increase in the total asset base. While assets remained relatively stable between 80.9 billion and 87.8 billion from March 2022 through December 2024, they expanded to 102.6 billion by June 2026. The compression of the ROA ratio suggests that asset growth initially outpaced the growth in profit attributable to common stockholders.
- Profitability Dynamics
- Profit attributable to common stockholders exhibited overall growth, rising from 1.54 billion in March 2022 to a peak of 3.59 billion in June 2026. Despite quarterly volatility, the substantial increase in net income during the first half of 2026 served as the primary driver for the recovery in asset efficiency, successfully offsetting the impact of the expanded asset base.