Caterpillar's third-quarter sales grow 17 percent to $20.7 billion

What happened

Caterpillar reported on Thursday 29 October that third-quarter sales and revenues were $20.7 billion, 17 percent more than a year earlier, with power equipment for data centers leading. ^[1]

Higher sales volume added $2.2 billion and better prices $663 million, the company said. Operating profit was $4.214 billion, against $3.052 billion a year earlier, and the operating margin was 20.4 percent, against 17.3 percent. ^[1]

Profit was $3.287 billion, against $2.300 billion. Operating profit included $128 million of recovered tariffs, money returned after the Supreme Court ruled in February that tariffs imposed under the emergency powers law were unauthorized. ^{[1, 2]}

Why it matters

Power & Energy sold $8.784 billion in the quarter and Construction Industries $7.983 billion, putting power ahead; in the second quarter construction led, $8.346 billion against $8.238 billion. ^{[1, 3]}

Chief Executive Joe Creed said the results 'reflect the durability of our end markets, with strong order rates and a record backlog.' The release gives no backlog figure; at the end of June the company put it at $72 billion. ^{[1, 4]}

The three segments

Power & Energy sales were up 18 percent. Power generation sales grew 30 percent to $3.421 billion, mainly turbines and large engines 'primarily in data center applications,' and the segment's profit margin was 24.4 percent, against 21.9 percent. ^[1]

Construction Industries sales grew 18 percent, with North America 23 percent higher. Its margin was 22.9 percent, against 20.4 percent, after $252 million of higher manufacturing costs that included freight, the company said. ^[1]

Resource Industries, the mining and rail business, grew sales 15 percent to $4.615 billion, while rail sales were down 5 percent on fewer locomotives delivered abroad. Its margin was 13.5 percent, against 13.6 percent, as manufacturing costs grew $208 million, 'primarily' from 'higher material costs, including tariffs,' according to the release. ^[1]

The outlook

In its quarterly report of Wednesday 5 August, Caterpillar said it expected 2026 sales and revenues growth 'in the mid-to-high teens' and tariff costs of around $2.2 billion, not counting the recoveries. It said then that the third quarter would carry about $600 million of tariff costs. ^[2]

Reuters reported on Tuesday 4 August that the $2.2 billion was cut from an earlier range of $2.2 billion to $2.6 billion. The release of Thursday 29 October carries no full-year outlook; the company said slides would be posted before its 7:30 a.m. Central webcast that day. ^{[5, 1]}

What settles it next

Derrick York, who runs the Solar Turbines gas turbine business, becomes group president of Resource Industries on Sunday 1 November, the company said on Thursday 15 October. In August the company said it expected Construction Industries' dealer inventory to fall by over $1.0 billion in the fourth quarter. ^{[6, 2]}

Who it reaches

Caterpillar (CAT) is direct: the results are its own, filed with the SEC as a current report on Thursday 29 October. ^[1]