Caterpillar’s Backlog Hits $78.1 Billion as Shares Fall 8% After Results
Key Facts
Caterpillar reported sales and revenue of $20.7 billion in the third quarter of 2026, up 17% from the same period a year earlier, while adjusted earnings per share rose to $7.20, topping the $7.08 estimate from LSEG analysts, according to Reuters. Results were supported by higher sales volume and improved pricing, while the order backlog reached a record. The company, however, kept its annual revenue growth outlook at the mid-to-high teens, compared with analysts’ forecast of about 18% growth. Shares fell 8% in trading on Oct. 29, despite adjusted earnings per share topping estimates. Chief Executive Joe Creed said the quarter’s results reflected “the resilience of our end markets, with strong order rates and a record backlog.”
Revenue was $17.6 billion in the third quarter of 2025, putting the latest period’s year-over-year increase at 17%. On a sequential basis, revenue growth slowed from the 24% recorded in the previous quarter, according to Reuters. Operating margin was 20.4%, compared with 17.3% a year earlier, while adjusted operating margin rose to 20.6% from 17.5%. Earnings per share increased to $7.13 from $4.88, and adjusted earnings rose to $7.20 from $4.95. The figures reflect higher profitability and improved margins alongside sales growth, while the annual guidance indicated the company had not raised its outlook despite the results.
Caterpillar attributed the revenue increase mainly to a $2.2 billion contribution from higher sales volume and $663 million from improved pricing. In the energy segment, sales were $8.784 billion, up 18% from $7.463 billion in the corresponding quarter of 2025. Power generation application sales rose 30% to $3.421 billion, compared with $2.634 billion a year earlier. The company linked the activity’s growth mainly to large turbines and engines used in data centers. Energy segment profit was also $2.143 billion, up 31%, and its profit margin rose to 24.4% from 21.9%.
The order backlog, which reached $78.1 billion, provides an indication of future demand; it increased by $6 billion from the previous quarter. Reuters said, however, that the increase was slower than in prior periods and may have fallen short of the bullish $80 billion expectations cited by JPMorgan. Creed said the company’s visibility on demand extends beyond the backlog to 2030 and, in some cases, further. At the same time, expanding manufacturing capacity for engines and turbines takes time, limiting how quickly the company can meet rising demand. Reuters also noted that growing opposition to data centers and calls to slow AI development had weakened investor sentiment.
The company kept its estimate for annual tariff costs unchanged at about $2.2 billion. Reuters said tariffs and record diesel prices are pushing up shipping costs, and Caterpillar expects current-quarter revenue growth to moderate compared with the 18% growth in the same period last year. Enterprise operating cash flow was $4.4 billion, and the company ended the quarter with enterprise cash of $7.9 billion. It used $1.2 billion for share repurchases and $0.7 billion for dividends during the quarter. The third-quarter results call is scheduled for Oct. 29, 2026, at 8:30 a.m. Eastern time.
In trading on Oct. 29, Caterpillar was the second-largest negative contributor to the Dow Jones Industrial Average, which was down 0.24% at the time, according to Reuters. The shares closed at $647.39, compared with a close of $713.38 on Oct. 28. Reuters said the stock’s intraday decline reached 8%, putting it on track for its biggest one-day drop since the previous April. Trading came under pressure despite higher revenue and adjusted earnings, as the company kept its 2026 growth guidance below analysts’ forecast of about 18%. The company’s ability to expand production of equipment linked to data centers, along with the impact of shipping costs and tariffs, remained among the factors shaping the outlook for the coming period.