Caterpillar posts record $20.5B quarter as AI power demand lifts outlook

Caterpillar reported record Q2 revenue of $20.5 billion, up 24% year over year, beating the $18.36 billion consensus estimate.

"This is the first time in company history that we have generated over $20 billion in sales and revenues in a single quarter," Chairman and CEO Joe Creed said.

Adjusted EPS of $8.17 beat the $5.71 estimate, while GAAP EPS rose to $7.77 from $4.62. Operating profit climbed 50% to $4.295 billion, and adjusted operating margin expanded 430 basis points to 21.9%. Order backlog reached a record $72.1 billion, up $34.6 billion year over year, with 59% expected to ship within 12 months.

Metric	Actual	Consensus	Beat/Miss
Revenue	$20.5B	$18.36B	+11.7%
Adjusted EPS	$8.17	$5.71	+$2.46

Shares rose as much as 12% in early trading. The company raised its full-year sales growth outlook to mid-to-high teens, up from low-double-digit growth, and now expects MP&E free cash flow in the top half of its $6 billion to $15 billion range.

Segment strength

Power & Energy sales rose 17% to $8.238 billion, with power generation sales to users jumping 72% on data-center demand for large gensets and turbines. Construction Industries sales climbed 35% to $8.346 billion, while Resource Industries sales increased 20% to $4.648 billion. Financial Products revenue gained 10% to $1.145 billion.

To capture demand, Caterpillar is restarting production of its 10-megawatt medium-speed gas reciprocating engine platform, bringing 1.5 gigawatts of capacity back online with first shipments expected in the fourth quarter. Orders extend into 2029 and 2030, Creed said.

Tariffs and guidance

Tariff costs came in at about $400 million in the quarter, below the $700 million estimate, aided by $392 million in expected IEEPA recoveries. The company now expects full-year tariff costs of about $2.2 billion, at the low end of its prior range.

Caterpillar returned $2.2 billion to shareholders in the quarter, including $1.5 billion in buybacks and $700 million in dividends. It ended the quarter with $6.7 billion in enterprise cash.

The guidance raise shows management expects AI-driven power demand to keep accelerating. Investors will watch the third-quarter earnings call for updated segment margins and capacity ramp progress.

This article is for informational purposes only and does not constitute investment advice.