Energy equipment leads a growing business
The Irving-based company reported on October 29 that third-quarter revenue increased 17% to $20.7 billion, while net profit rose from $2.3 billion a year earlier. Its construction machinery business also performed well, according to dpa-AFX.
Although Caterpillar is best known for excavators and bulldozers, Power & Energy has overtaken construction machinery to become its largest segment by revenue. The division produces generators, large engines and gas turbines. dpa-AFX described Caterpillar as one of the biggest beneficiaries of spending on AI infrastructure.
Caterpillar's results release put reported earnings at $7.13 per share, compared with $4.88 a year earlier. Adjusted earnings increased from $4.95 to $7.20 per share, exceeding analysts' expectations, according to dpa-AFX.
Profitability also improved: the operating margin reached 20.4%, up from 17.3%, while the adjusted operating margin increased to 20.6% from 17.5%. For full-year context, the corporate profile accompanying the release listed Caterpillar's 2025 sales and revenues at $67.6 billion.
Stock extends its retreat from summer highs
The premarket decline of more than 10% left Caterpillar shares at risk of reaching their lowest level since January. By Wednesday's close, the stock had already fallen 33% from its summer record of nearly $1,100.
Despite that retreat, Caterpillar's market value was still up roughly 25% for the year, at just under $330 billion.
The selloff comes amid broader pressure on AI-linked stocks, dpa-AFX reported. Investors have grown more cautious about the vast sums technology companies are spending on data centers, while rising interest rates have heightened concerns about financing costs for the expansion.
Cash generation and shareholder payouts
Caterpillar reported $4.4 billion in enterprise operating cash flow for the third quarter and an enterprise cash balance of $7.9 billion at quarter-end.
The company said it deployed $2.0 billion for share repurchases and dividends during the quarter. It listed $1.2 billion in common-stock repurchases and $0.7 billion in dividend payments.
