Caterpillar posts $20.7 billion in revenue; shares fall 10% at the open
Key Facts
Caterpillar reported a 17% rise in sales and revenue in the third quarter of 2026, supported by stronger demand for power and construction equipment, while its shares opened down 10% on October 29. Chief Executive Joe Creed said the results reflected "the resilience of our end markets," citing strong order rates and a record backlog. The backlog stood at $78.1 billion, up $6 billion from the previous quarter. But the pace of growth was slower than in earlier periods of the year, according to Reuters. Investors focused on the unchanged full-year outlook and how long demand tied to data centers would last.
Adjusted earnings per share topped analysts’ estimates, while revenue fell short of expectations. Analysts surveyed by FactSet had forecast adjusted earnings of $7.06 a share and revenue of $20.76 billion. The company reported revenue of $20.7 billion, up 17% year over year, according to its statement. Shares fell 8.6% to $652 in premarket trading Thursday, according to Dow Jones Newswires. The divergence between the share price and growth in revenue and earnings reflects investors’ sensitivity to the outlook after the company left its annual estimates unchanged.
Demand for power equipment was one of the main drivers of results, as Caterpillar benefited from the expansion of data centers in the United States. Reuters said the AI-driven expansion boosted demand for construction equipment and generators. The company said power-generation sales increased mainly in turbines and related services, as well as large reciprocating engines, particularly for data-center applications. Reuters also reported that opposition to some data centers and calls to slow AI development weakened investor sentiment. These factors put current demand growth up against market questions about its durability.
Data-center demand also fueled interest in construction equipment and generators, while the backlog exceeded the previous quarter’s level by $6 billion. The record backlog reached $78.1 billion at the end of the third quarter, according to Reuters. However, the quarterly increase was slower than the pace recorded in earlier periods of the year, making the backlog’s size and growth trajectory separate elements in the market’s assessment. Creed said order rates were strong and linked his assessment to the resilience of end markets. The backlog indicates the volume of work awaiting the company, while its slower growth is drawing attention to the direction of demand.
Caterpillar maintained its forecast for fiscal 2026 sales and total revenue growth in the mid-to-high teens, according to Dow Jones Newswires. It also held its estimate of tariff costs at about $2.2 billion for the fiscal year. The annual guidance was unchanged despite higher revenue and demand during the quarter, a point Reuters cited in its coverage of the share decline. Before results were announced, the company’s call and live webcast were scheduled to begin at 7:30 a.m. Central time on October 29. Shares closed at $713.38 on October 28, before the results announcement, according to EL7 data.