TLDR
- Caterpillar reported Q3 earnings of $4.95 per share on $17.6 billion in sales, beating analyst expectations of $4.52 per share and $16.8 billion in sales.
- The stock jumped 12% to $588.04, marking its biggest one-day gain since March 2009 and hitting a record high.
- This was the first time reported sales grew since Q4 2023, as construction markets had been declining for several quarters.
- The energy and transportation segment drove growth with 17% year-over-year sales increase, powered by demand for generators at AI data centers.
- The company raised its full-year sales outlook from “slightly” higher to “modestly” higher compared to 2024.
Caterpillar shares rocketed higher on Tuesday after the heavy equipment maker crushed Wall Street estimates. The stock gained 12% to $588.04, setting a new record high.
The move represents Cat’s best single-day performance since March 4, 2009, when shares climbed 13%. Year to date, the stock has now gained 45%.
The company reported adjusted earnings of $4.95 per share on revenue of $17.6 billion. Analysts had expected earnings of $4.52 per share on sales of $16.8 billion.
This marks the first time Cat’s reported sales have grown since the fourth quarter of 2023. The construction equipment market has been sluggish as residential building slowed.
Revenue Growth Returns After Four Quarters
CEO Joe Creed pointed to resilient demand and strong execution across Cat’s three main business segments. The company’s backlog continues to grow, positioning it for continued momentum.
The construction division posted sales of $6.8 billion, up 7% from last year. That’s a turnaround from the second quarter, when construction sales fell 7%.
Residential construction remains weak. But commercial construction markets show signs of stabilizing, according to analyst reports.
Mining sales reached $3.1 billion, up 2% year over year. That segment had declined 4% in the previous quarter.
Data Center Generators Drive Standout Performance
The real star was Cat’s energy and transportation segment. Sales hit $8.4 billion, jumping 17% from the prior year.
This division includes generators for AI data centers, which are proliferating as tech companies race to build computing capacity. Orders in this segment surged 25% year over year.
The strength in power generation equipment led Cat to upgrade its full-year outlook. The company now expects sales to be up “modestly” versus 2024.
That’s better than the previous forecast of “slightly” higher sales. Cat started 2025 expecting sales to decline “slightly.”
Operating profit came in at $3.1 billion. That’s down nearly $100 million from last year, as higher tariff costs offset the benefit of increased sales volume.
Wall Street had projected roughly 2% sales growth for the full year. Management is now catching up to those expectations.
Options traders had priced in about a 4% move following the earnings report. The actual 12% surge far exceeded that estimate.
Cat stock has moved an average of 2% after earnings over the past four quarters, with two gains and two losses in that span.
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