Caterpillar beats earnings estimates as AI power demand grows, but shares fall

Strong demand for equipment powering AI data centers did not spare Caterpillar from a selloff. Shares fell more than 4% immediately after its October 29, 2026, earnings statement, Bloomberg reported. The company posted third-quarter adjusted earnings of $7.20 a share, beating the $7.10 average estimate in Bloomberg’s analyst survey.

The quarter delivered a clear gain in the business most directly tied to that demand. Power Generation sales rose 30% to $3.421 billion, with turbines and large engines sold to data centers driving growth, according to 24/7 Wall St. Those sales sit inside a much larger industrial company whose results also depend on construction equipment.

Power equipment takes a larger role

Caterpillar’s broader power and energy segment has become its largest business by sales, Bloomberg reported. It makes generators, large engines and gas turbines, extending the company’s business beyond the excavators and bulldozers for which it is best known. Bloomberg linked demand for that equipment to the electricity needs of AI data centers.

The broader segment and the Power Generation product line are different measures. Construction Industries alone generated $7.983 billion in the quarter, more than the power-generation line. The data-center equipment figures therefore capture one part of Caterpillar’s sales, not the performance of the entire company or a total for revenue from AI customers.

Company-wide revenue rose 17.3% to $20.68 billion. That was just below the $20.69 billion analyst estimate cited by 24/7 Wall St.—essentially matching expectations rather than delivering a sales surprise. The earnings beat and the revenue comparison thus tell different stories: profit per share exceeded forecasts, while sales closely tracked them.

$128 millionTariff refund included in operating profit

24/7 Wall St. identified $128 million in IEEPA tariff collections as tariff refunds included in Caterpillar’s reported operating profit.

A record backlog without a dollar figure

CEO Joe Creed described strong order rates and a record backlog, saying the results reflected durable end markets. But the earnings release did not give a dollar value for that backlog or provide numeric guidance, according to 24/7 Wall St. The statement paired a positive description of future business with limited detail about its scale.

There is an earlier benchmark. On Caterpillar’s August 4 earnings call, Creed put the backlog at $72 billion, 24/7 Wall St. reported. His latest description signals a new record, but the release did not quantify the increase from that earlier figure. The distinction matters when comparing management’s description with a measurable change in outstanding business.

More capacity, with deliveries stretching years ahead

Caterpillar is pursuing a multiyear expansion of large-engine and gas-turbine capacity to meet demand, Bloomberg reported. It also raised its power-generation equipment sales targets earlier in 2026. Those steps preceded this earnings release; they describe how the company has been responding to demand, rather than a new investment announcement accompanying the quarter.

Creed’s August comments also showed how far delivery schedules had stretched. Lead times for gas prime power—generators designed to run around the clock—extended into the second half of 2028 and into 2029, with turbines further out, according to 24/7 Wall St. Those were the schedules described in August, not an updated delivery forecast in Thursday’s release.