NEW YORK, August 4, 2026, 07:06 EDT
- Adjusted earnings came in at $8.17 per share, topping the consensus forecast of $6.20. Revenue totaled $20.54 billion, above the expected $19.20 billion.
- The stock climbed 7.5% ahead of the opening bell. Backlog reached an all-time high of $72.1 billion, marking a 92% increase compared to a year earlier.
- The construction division contributed an initial 54% to overall consolidated revenue growth, while Power & Energy accounted for roughly 25%.
Caterpillar stock surged 7.5% in premarket trading on Tuesday after the company reported record quarterly results that surpassed expectations. Caterpillar raised its sales guidance for 2026. Adjusted earnings came in at $8.17 per share, and revenue climbed 24% to $20.54 billion.
Pre-earnings discussions focused on power demand tied to AI. The unexpected factor was scope. Construction was responsible for the largest share of additional revenue and accounted for almost 50% of the rise in operating profit.
This lowers immediate dependence on a single end market, but sets a higher bar for execution. With shares priced around $890 before the market opened, this suggests a trailing earnings multiple of about 44 times, based on an initial estimate.
The biggest surprise was seen in results outside of revenue. Analysts’ consensus numbers were up-to-date before the opening bell on Wall Street.
| Metric | Q2 2026 actual | Consensus estimate | Surprise | Q2 2025 | Year-on-year change |
|---|---|---|---|---|---|
| Revenue | $20.54B | $19.20B | +7.0% | $16.57B | +24% |
| Adjusted EPS | $8.17 | $6.20 | +31.8% | $4.72 | +73% |
| Adjusted operating margin | 21.9% | — | — | 17.6% | up 430 basis points |
The earnings per share beat was 4.5 times greater than the revenue surprise. Increased volume, beneficial pricing, and broader margins drove a boost in top-line performance. Sales volume accounted for a $3.1 billion rise, with pricing bringing in an additional $595 million.
A portion of profit was due to tariff recoupment. Caterpillar posted $392 million in anticipated International Emergency Economic Powers Act recoveries, equivalent to approximately $0.65 per share. Without this item, an initial estimate puts operating profit growth at close to 36%, compared with the reported 50%. Tariff expenses for the second quarter totaled around $400 million, under the previous $700 million projection.
The segment figures reflect a broader foundation for the quarter. Each of the three main divisions reported sales growth in the double digits.
| Primary segment | Q2 sales | Sales growth | Segment profit | Profit growth | Profit margin |
|---|---|---|---|---|---|
| Power & Energy | $8.238B | +17% | $2.027B | +30% | 24.6% |
| Construction Industries | $8.346B | +35% | $1.947B | +57% | 23.3% |
| Resource Industries | $4.648B | +20% | $693M | +23% | 14.9% |
Construction was the main driver of growth, with external sales rising by $2.138 billion, spurred by a 50% surge in North America. Segment profit increased 57%, mainly due to greater sales volume.
Construction led incremental changes compared to the consolidated mix. The contribution shares listed below are based on initial estimates.
| Segment | External-sales increase | Preliminary share of revenue growth | Segment-profit increase | Preliminary share of operating-profit growth |
|---|---|---|---|---|
| Construction Industries | $2.138B | 54% | $703M | 49% |
| Power & Energy | $1.001B | 25% | $473M | 33% |
| Resource Industries | $779M | 20% | $130M | 9% |
Revenue shares are based on external sales. Profit shares measure segment changes against overall operating-profit growth. The rest consists of Financial Products, corporate items and rounding adjustments.
AI infrastructure continued to drive significant growth. Revenue from power-generation increased by 29% to $3.098 billion. Another dealer-related retail metric jumped 72%. Caterpillar attributed the higher large engine and turbine sales mainly to demand from data-center customers.
Chairman and CEO Joe Creed stated, “Strong order rates and a growing backlog reflect broadening momentum across all three of our primary segments.” https://www.caterpillar.com/en.html
Backlog increased by $9.4 billion since March to reach $72.1 billion, up 92% from the prior year. Based on the second-quarter revenue pace, this backlog represents 3.5 quarters, or about 10.5 months, on an initial estimate. The metric does not indicate when the backlog will be converted.
Management lifted its growth outlook and at the same time reduced the effective tariff load.
| Measure | Previous view or quarter | Current view or quarter | Change |
|---|---|---|---|
| Order backlog | $62.7B at Q1 | $72.1B at Q2 | +$9.4B, or 15% |
| 2026 sales growth | Low-double-digit percentage | Mid-to-high teens | Upgraded |
| Q2 tariff costs | About $700M expected | About $400M, excluding recoveries | Roughly $300M less |
| 2026 tariff costs | $2.2B–$2.4B | Around $2.2B, excluding recoveries | At the low end of earlier range |
Caterpillar projects solid sales growth for the third quarter and anticipates an adjusted margin above last year’s level. The company forecasts that its full-year margin, excluding IEEPA recoveries, will be close to the lower end of its targeted range. Free cash flow from Machinery, Power & Energy is expected to finish in the upper half of the annual range.
Cash conversion remained robust. Free cash flow for Machinery, Power & Energy climbed 118% to $5.1 billion. Caterpillar distributed $2.2 billion via dividends and share buybacks.
Risks: The backlog does not represent assured revenue. There is potential for a slowdown in data-center permits and construction investment. Caterpillar continues to project approximately $2.2 billion in 2026 tariff expenses, not counting IEEPA-related recoveries.
The 8:30 a.m. ET call allows management to discuss backlog composition and conversion in greater detail. Investors are likely to look for insight into normalized margins. The quarter met earnings expectations, putting a spotlight on execution.
