Caterpillar Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Consolidated sales and revenues increased 17% year-over-year to $20.7 billion in Q3 2026, compared to $17.6 billion in Q3 2025.
• Profit per share was $7.13 in Q3 2026, up from $4.88 in Q3 2025.
• Adjusted profit per share was $7.20 in Q3 2026, up from $4.95 in Q3 2025.
• Operating profit margin was 20.4% in Q3 2026, compared to 17.3% in Q3 2025.
• Adjusted operating profit margin was 20.6% in Q3 2026, compared to 17.5% in Q3 2025.
• Operating profit increased 38% to $4.214 billion in Q3 2026, compared to $3.052 billion in Q3 2025.
• Enterprise operating cash flow was $4.4 billion in Q3 2026.
• The company ended the quarter with $7.9 billion in enterprise cash.
• Revenue growth was driven by a $2.2 billion increase in sales volume and $663 million in favorable price realization.
• Other income was $135 million in Q3 2026, down from $208 million in Q3 2025.
• The effective tax rate was 22.9% in Q3 2026, compared to 26.7% in Q3 2025.
• Restructuring costs of $41 million were included in Q3 2026 results.

Guidance and Future Outlook:

• Management stated the company is positioned for a strong year with strong order rates and a record backlog.
• CEO Joe Creed highlighted the durability of end markets and execution of strategic priorities in a dynamic environment.
• No specific numerical forward guidance for full-year 2026 was provided in the release.

Business Segments and Product Lines:

• Power & Energy: Sales increased 18% to $8.784 billion; segment profit rose 31% to $2.143 billion. Growth driven by higher sales volume and price realization, specifically in data center applications, turbines, and gas compression engines.
• Construction Industries: Sales increased 18% to $7.983 billion; segment profit rose 33% to $1.831 billion. Growth driven by higher sales volume to end users and favorable price realization.
• Resource Industries: Sales increased 15% to $4.615 billion; segment profit rose 14% to $622 million. Growth driven by mining, heavy construction, and quarry applications, partially offset by lower international locomotive deliveries in rail.
• Financial Products: Revenues increased 9% to $1.177 billion; segment profit rose 10% to $264 million. Growth driven by higher average earning assets, partially offset by lower average financing rates and higher provision for credit losses.
• All Other Segment: Sales decreased 1% to $72 million.

Market and Competitive Landscape:

• Sales increased across all three primary business segments.
• North America saw strong growth, with Construction Industries sales up 23% and Power & Energy up 26%.
• Latin America sales grew 15% to 26% across segments, driven by dealer inventory changes and volume.
• EAME sales increased 12% to 22% across segments.
• Asia/Pacific sales were mixed, with Construction Industries up 2% and Power & Energy up 4%, while Resource Industries declined 6% due to currency impacts related to the Japanese yen.
• The company noted unfavorable manufacturing costs, including higher freight and material costs (including tariffs), impacting margins in Construction and Resource Industries.

Risks and Challenges:

• Unfavorable manufacturing costs, including higher freight and material costs (including tariffs), impacted profitability.
• Currency fluctuations, specifically the Japanese yen, negatively impacted Asia/Pacific sales.
• Higher provision for credit losses at Cat Financial ($34 million) partially offset profit growth in the Financial Products segment.
• Unfavorable impacts from total return swap contracts reduced other income.

Management Commentary and Tone:

• CEO Joe Creed expressed confidence, citing "durability of our end markets" and "strong order rates."
• Management emphasized a record backlog and continued execution of strategic priorities.
• The tone was positive regarding the company's ability to deliver long-term value for customers and shareholders.

Other Key Points:

• The company deployed $2.0 billion of cash for share repurchases and dividends in the third quarter ($1.2 billion for repurchases and $0.7 billion for dividends).
• Operating profit in Q3 2026 included $128 million of International Emergency Economic Power Act (IEEPA) tariff recoveries.
• Past dues at Cat Financial were 1.31% at the end of Q3 2026, down from 1.47% in Q3 2025.
• Write-offs, net of recoveries, were $28 million in Q3 2026, compared to $40 million in Q3 2025.
• The allowance for credit losses at Cat Financial totaled $332 million (0.91% of finance receivables) as of September 30, 2026.
• Expense for corporate items and eliminations decreased $131 million to $453 million, primarily due to favorable changes in fair value adjustments related to deferred compensation plans.