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David Paul Morris \/ Bloomberg via Getty Images<\/p>\n
Caterpillar reported gains in its construction industries sector as well as in its other two units <\/p>\n
Caterpillar reported better-than-expected earnings and revenue on strong demand for equipment needed for artificial intelligence data centers.<\/p>\n
Caterpillar said even though tariff costs were at the high end of its outlook, the impact was offset by higher volumes.<\/p>\n
Caterpillar (CAT) shares skyrocketed to an all-time high when the big farm and construction machines maker easily beat profit and sales expectations, with strong demand for data center power-generation equipment more than offsetting tariff headwinds.<\/p>\n
The company reported third-quarter adjusted earnings per share of $4.95, about 10% above what analysts surveyed by Visible Alpha were looking for. Revenue increased 9.5% to $17.64 billion, $1 billion above forecasts.<\/p>\n
All three of Caterpillar’s business segments posted quarterly gains, but a key driver of its future growth may be an unexpected one for the construction equipment maker: AI data centers’ demand for electricity. That helps explain why Caterpillar stock is one of the year’s top performers<\/a>.<\/p>\n All three of Caterpillar\u2019s segments posted gains, but the Energy and Transportation unit was the big story, with sales jumping 17% to $8.4 billion. Within the energy segment, power generation sales surged 31%, easily outpacing other applications. Sales rose 7% to $6.76 billion in Caterpillar’s Construction Industries segment, and increased 2% to $3.11 billion in Resource Industries.<\/p>\n In a call with analysts, CEO Joe Creed said the strong results this quarter were “driven by resilient demand and focused execution across our three primary segments,” according to a transcript provided by AlphaSense. Creed also said tariff costs were at the top end of the company’s estimate of $500 million to $600 million, but even with that headwind, \u201cadjusted operating profit margin<\/a> was slightly above our expectation, primarily due to better than expected sales volume.”<\/p>\n Shares of Caterpillar were up 12% in midday trading on Wednesday and are up more than 60% in 2025.\u00a0<\/p>\n