Caterpillar (NYSE:CAT) Announces Earnings Results

Caterpillar (NYSE:CAT) released its earnings results on Thursday. The industrial products company reported $7.20 earnings per share for the quarter, topping analysts’ consensus estimates of $7.06 by $0.14, FiscalAI reports. Caterpillar had a return on equity of 55.53% and a net margin of 14.51%. The company had revenue of $20.68 billion during the quarter, compared to the consensus estimate of $20.76 billion. During the same quarter in the previous year, the company posted $4.95 earnings per share. The firm’s quarterly revenue was up 17.3% on a year-over-year basis.

Here are the key takeaways from Caterpillar’s conference call:

• Record third-quarter performance: Sales and revenues rose 17% to $20.7 billion, while adjusted profit per share increased 45% to $7.20. Caterpillar said strong volume and favorable pricing drove results across its three primary segments.
• Backlog and Power & Energy demand remain exceptionally strong: Backlog reached a record $78 billion, up 96% year over year, with large reciprocating-engine orders extending into 2029 and turbine orders into 2030. Data-center, cloud-computing, AI, prime-power, and oil-and-gas demand are supporting growth, although capacity remains the key constraint.
• Full-year outlook was maintained: Caterpillar continues to expect 2026 sales growth in the mid-to-high teens and MP&E free cash flow in the top half of its $6 billion-$15 billion target range. However, excluding tariff recoveries, adjusted operating margin is expected near the bottom of its target range because of tariffs, freight, capacity-expansion costs, and higher investment spending.
• Fourth-quarter growth will face a difficult comparison and inventory headwind: The company expects moderate year-over-year sales growth, with Construction Industries dealer inventory projected to decline about $1.6 billion, creating an approximately $1 billion volume headwind versus the prior year. Capacity ramp-up and operational challenges also limit near-term growth in Power & Energy and Resource Industries.
• Cash generation and customer credit quality remain strong: Third-quarter MP&E free cash flow was $3.8 billion, and Caterpillar returned $2 billion to shareholders through buybacks and dividends. Cat Financial reported past-due accounts of just 1.31%, the lowest level recorded since 1998, while strategic investments are expanding engine, compact-equipment, and autonomous-hauling capacity.

Caterpillar Stock Performance

Caterpillar stock traded down $20.51 during mid-day trading on Friday, reaching $626.88. The company’s stock had a trading volume of 2,433,215 shares, compared to its average volume of 2,845,187. The company has a market capitalization of $288.16 billion, a P/E ratio of 27.01, a PEG ratio of 1.22 and a beta of 1.58. The firm’s fifty day moving average price is $787.07 and its two-hundred day moving average price is $807.56. Caterpillar has a 12-month low of $537.08 and a 12-month high of $1,073.46. The company has a debt-to-equity ratio of 1.65, a quick ratio of 0.85 and a current ratio of 1.37.

Caterpillar Announces Dividend

The company also recently announced a quarterly dividend, which will be paid on Thursday, November 19th. Shareholders of record on Monday, October 26th will be given a $1.63 dividend. This represents a $6.52 dividend on an annualized basis and a yield of 1.0%. The ex-dividend date of this dividend is Monday, October 26th. Caterpillar’s dividend payout ratio (DPR) is currently 28.06%.

Caterpillar News Roundup

Here are the key news stories impacting Caterpillar this week:

• Positive Sentiment: Third-quarter sales and revenues rose 17% year over year to approximately $20.7 billion, while adjusted profit per share of $7.20 exceeded analysts’ expectations. Higher volume, pricing and operating leverage lifted profitability. Caterpillar Reports Third-Quarter 2026 Results
• Positive Sentiment: Demand tied to data centers remains a key growth driver: power-generation sales increased about 30%, and Caterpillar reported a record backlog of roughly $78 billion extending into 2029–2030. Management also returned $2 billion through share repurchases and dividends during the quarter. Caterpillar posts highest sales quarter ever
• Neutral Sentiment: Some analysts see substantial long-term upside because the backlog could support revenue growth and margin expansion, with consensus estimates calling for approximately 17.8% revenue growth in fiscal 2026 and 10.8% in fiscal 2027. However, the stock’s valuation leaves limited room for execution setbacks.
• Negative Sentiment: Revenue of $20.68 billion came in below the approximately $20.76 billion consensus estimate, and quarterly growth slowed from 24% in the prior quarter. Investors had expected Caterpillar to raise its annual outlook, but management maintained its existing forecast and characterized fourth-quarter revenue growth as moderate. Caterpillar Sales Jump, But Wall Street Wanted More
• Negative Sentiment: Rising inventories, tariff-related costs and concerns about the pace of backlog conversion are adding pressure to the outlook. After a major prior rally, investors appear to be taking profits in AI-linked industrial stocks and demanding greater valuation support. Reports also indicate substantially more insider selling than buying in recent months.

Insider Activity at Caterpillar

In other Caterpillar news, CEO Joseph E. Creed sold 32,401 shares of the stock in a transaction that occurred on Friday, August 28th. The shares were sold at an average price of $808.98, for a total value of $26,211,760.98. Following the sale, the chief executive officer directly owned 34,555 shares in the company, valued at $27,954,303.90. This represents a 48.39% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. Company insiders own 0.33% of the company’s stock.

Analyst Ratings Changes

Several research analysts have recently weighed in on the company. UBS Group reduced their price objective on Caterpillar from $925.00 to $750.00 and set a “neutral” rating for the company in a research report on Monday. Zacks Research cut shares of Caterpillar from a “strong-buy” rating to a “hold” rating in a research note on Monday, October 5th. Royal Bank Of Canada cut their price target on Caterpillar from $897.00 to $722.00 and set a “sector perform” rating for the company in a report on Friday. Erste Group Bank cut Caterpillar from a “buy” rating to a “hold” rating in a research report on Monday, July 27th. Finally, President Capital assumed coverage on Caterpillar in a research note on Friday, September 18th. They issued a “buy” rating and a $999.00 price target for the company. Fifteen investment analysts have rated the stock with a Buy rating and twelve have issued a Hold rating to the stock. According to MarketBeat, the company currently has an average rating of “Moderate Buy” and an average price target of $937.08.

Caterpillar Company Profile

Caterpillar Inc is a manufacturer of construction, mining, and industrial equipment. Its product portfolio includes excavators, bulldozers, wheel loaders, motor graders, articulated trucks, and other machinery used in construction, infrastructure development, mining, quarrying, forestry, and related industries. The company also produces diesel and natural gas engines, industrial gas turbines, generator sets, and other power-generation and transportation equipment.

Caterpillar operates through businesses focused on construction industries, resource industries, and energy and transportation.