Caterpillar Inc

XMUN:CAT1

Record quarter: Caterpillar reported second-quarter sales and revenues of $20.5 billion, up 24% year over year and above expectations, marking the first time in company history it topped $20 billion in a quarter.

Strong earnings: Adjusted profit per share came in at $8.17, up 73% from last year, with adjusted operating profit margin of 21.9%.

Backlog surge: Backlog rose $9 billion sequentially to $72 billion, up about $35 billion or 92% from a year ago, reflecting strong orders across all three main segments.

Outlook raised: Management lifted full-year 2026 sales and revenue growth guidance to mid- to high-teens growth and said free cash flow should land in the top half of its $6 billion to $15 billion target range.

Tariff impact: Tariff costs were better than expected in the quarter, helped by $392 million of IEEPA tariff recoveries, but management still expects about $2.2 billion of tariff costs for 2026.

Power demand: Power & Energy demand remains very strong, especially for data center-related generation, and management said customers are not slowing down and are asking for more units.

Rental growth: Construction Industries benefited from stronger rental fleet loading and the new Major Projects dealer rental venture, which management sees as an important growth driver.