CaterpillarCAT

The company reported record quarterly revenue of $20.5 billion, a 24 percent increase over last year and well ahead of the $19.3 billion analysts expected. Adjusted profit reached $8.17 per share, easily beating the $6.22 estimate. This performance was fueled by intense demand for the engines and generators used in AI data centers, alongside steady orders for construction machinery.

This result shows the company is successfully shifting its business. While mining and construction can go through cycles, the push for AI infrastructure is creating a new and highly profitable source of growth. Management also returned $2.2 billion to shareholders through buybacks and dividends during the quarter, signaling confidence that these high profit levels can last.

See the full quarter, and how our tracked metrics did

Source: 8-K filing

Key highlights

• Historical sales record: The company crossed $20 billion in quarterly sales for the first time in its history, as total revenue grew 24% to $20.54 billion. This growth was fueled by $3.1 billion in higher sales volume, meaning the company sold more physical equipment to customers than it did a year ago.
• Construction demand surge: Sales in the construction division jumped 35% to $8.35 billion, led by a 50% increase in North America. This is a critical sign of health for the business as it reflects both strong end-user demand and $309 million in gains from the company's ability to raise prices.
• Data center growth: Energy and transportation sales rose 17% to $8.24 billion, with the power generation part of that business growing 29%. Management noted this was largely driven by high demand for the massive backup generators and turbines used to power data centers.
• Profit margins widening: Adjusted operating profit margin, which measures the percentage of every dollar kept after running the business, reached 21.9% compared to 17.6% last year. While the company faced $307 million in higher manufacturing costs, its ability to sell more units and raise prices more than offset those expenses.
• Shareholder cash returns: The company returned $2.2 billion to owners this quarter through $1.5 billion in stock buybacks and $0.7 billion in dividends. These returns are supported by $4.4 billion in cash flow from operations, which is the actual cash generated by its day to day business activities.
• Full year outlook: Management expects adjusted profit for the full year of 2026 to exclude certain costs like the $139 million loss from selling off parts of its international business. The company intends to report final full year results that also set aside one-time gains or losses from its employee pension and benefit plans.

Our take: This was an exceptionally strong quarter that saw the company hit a new record for sales. The double-digit growth in construction and power generation, especially for data centers, shows that demand is coming from several different industries at once. This performance reinforces the long-term case that the company is successfully capturing the global build-out of infrastructure and digital technology.