Caterpillar Sales Jump on Growing AI Demand, But Wall Street Wanted More — Update

By Connor Hart

Caterpillar continues to grow, just not fast enough for Wall Street.

The industrial-equipment maker said revenue rose 17% to $20.68 billion in the third quarter, missing analyst estimates and marking a sequential slowdown from the 24% gain the company logged three months prior.

Much of Caterpillar's growth in recent years has stemmed from its power-and-energy division, which manufactures large power-generation sets and turbines that serve electricity-hungry data centers. Sales across the unit climbed 18%, to $8.78 billion, during the recent quarter.

The artificial-intelligence boom continues to drive demand for power-and-energy products, Chief Executive Joe Creed said. Caterpillar is currently taking orders for large reciprocating engines into 2029, and orders for turbines into 2030. The company is also investing in the business, aiming to increase production and expand capacity to meet demand.

"The team is effectively managing the operational challenges that come with this rapid growth," Creed said on a call with analysts. "Bringing additional capacity online is still the top pacing factor for growth in power and energy."

Shares were down more than 10% premarket, before paring back some of the loss to be down 7.4%, at $666.60, after Thursday's opening bell. The stock is up about 10% year to date.

Outside of power and energy, Caterpillar said healthy construction activity across both residential and non-residential industries supported its construction-industries business--known for its giant yellow dump trucks and bulldozers.

The business logged sales of $7.98 billion, also up 18% from a year ago. Meanwhile, Caterpillar's resource-industries division notched sales of $4.62 billion, marking a 15% increase from last year.

"Strong order rates across all three of our primary segments drove backlog to a record $78 billion," said Creed, who noted Caterpillar's backlog as of Sept. 30 is nearly double that of a year ago.

Looking ahead, Caterpillar continues to expect total sales and revenue to grow in the mid- to high-teens range for the year. The company also maintained its forecast for tariff costs to total about $2.2 billion.

The outlook came as the company reported a profit of $3.29 billion, or $7.13 a share, in the latest quarter, up from $2.3 billion, or $4.88 a share, a year earlier. Stripping out one-time items, adjusted earnings of $7.20 a share topped the $7.06 a share that analysts expected, according to FactSet.

Write to Connor Hart at connor.hart@wsj.com

(END) Dow Jones Newswires

October 29, 2026 10:49 ET (14:49 GMT)