Quick Read
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CAT’s $72 billion backlog, with 59% expected to ship within 12 months, anchors the bull case after shares fell 15% over the past month.
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Power generation sales surged 72% last quarter on data center demand, but $2.2 billion in full-year tariff costs remain a significant headwind.
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Wall Street expects Q3 EPS to jump 42% year over year, yet five recent earnings beats produced an average one-week stock move of -1.3%.
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Caterpillar (NYSE:CAT) reports third-quarter results before the market opens on October 29. Shares have dropped 15.4% over the past month, so the record backlog now carries the bull case.
Record Quarter, Then a Sharp Pullback
Last quarter, Caterpillar passed $20 billion in quarterly revenue for the first time. Sales reached $20.54 billion, up 24.0% year over year. Adjusted EPS of $8.17 beat the $6.1974 consensus by 31.83%, and adjusted operating margin expanded 430 basis points to 21.9%.
Management raised its 2026 sales growth outlook to mid- to high-teens. Backlog rose $9 billion sequentially to $72 billion, and 59% of it is expected to ship within 12 months.
The stock gave back those gains. After a 5.6% earnings-day jump, shares sat 8.72% lower thirty days later. They closed at $686.79 on October 23, though they remain up 20.66% year to date.
Wall Street Expects 42% EPS Growth
Consensus calls for big gains against last year’s tariff-pressured results.
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Power Capacity and Tariff Costs Will Set the Tone
Power & Energy drives the story. Power generation sales to users grew 72% last quarter on data center demand for large generators and turbines. CEO Joe Creed put it plainly: “It’s not a demand issue right now. It’s just going to be a matter of how fast we can continue to increase production.” I’ll be watching for updates on the resumed 10-megawatt gas engine platform, which targets 1.5 gigawatts of capacity and starts shipping in the fourth quarter. Caterpillar is one of several non-chip suppliers riding the AI data center expansion, a group we profiled in a free report on seven AI infrastructure plays that aren’t chipmakers.
