Caterpillar’s Q4 sales hit record high and build momentum for 2026

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Dive Transient:

• Caterpillar reported record high sales and income of $19.1 billion throughout the fourth quarter, pushed by sturdy demand for development, mining and energy tools as tariff uncertainty affected manufacturing prices.
• The Irving, Texas-based firm noticed double-digit gross sales development throughout its three major segments throughout the interval. Working revenue, nonetheless, was $2.7 billion, a 9% decline over final 12 months. Greater tariff and restructuring prices had been partially offset by turbine and engine orders from oil and gasoline and information heart prospects.
• Caterpillar just lately agreed to provide two-gigawatt generators for American Intelligence and Energy Corp’s multibillion-dollar information heart improvement in Mason County, West Virginia. Excluding this deal, the corporate’s order backlog reached a report excessive $51 billion on the finish of the 12 months.

Dive Perception:

“With a report backlog, we enter the brand new 12 months with sturdy momentum and a continued deal with delivering long-term worth for our prospects and shareholders,” Caterpillar CEO Joe Creed mentioned on an earnings call Thursday.

Throughout the quarter, the most important gross sales enhance got here from the corporate’s energy and power phase, previously generally known as transportation and power, adopted by development and mining. Energy and power gross sales grew to $9.4 billion, up 23% over the earlier 12 months. Working revenue was $1.8 billion, up 25% from a 12 months in the past.

“We’re one of many quickest options on the market for information facilities who’re attempting to rise up and working rapidly,” Creed mentioned. The corporate is speaking with hyperscalers and enormous information heart prospects on a weekly foundation to make sure it’s aligned with their mission plans, he mentioned.

Development and mining tools gross sales additionally elevated throughout the interval over the earlier 12 months. Nonetheless, phase earnings fell brief on account of “unfavorable” tariff prices and costs. Caterpillar reported an almost $1 billion affect on manufacturing and $282 million linked to larger restructuring prices.

For the total 12 months, Caterpillar reported gross sales and income of $67.6 billion, up 4% from 2024. The rise got here, partially, from report gross sales within the firm’s energy and power phase. Energy era gross sales alone surpassed $10 billion in 2025, Creed mentioned. In the meantime, working revenue was $11.2 billion, down 15% from the earlier 12 months.

Tariff volatility raised manufacturing prices and harm profitability all through 2025. Caterpillar labored to mitigate tariffs within the type of price controls and pricing actions, leading to a web incremental headwind of $1.7 billion for the 12 months, Creed mentioned.

Wanting forward, Caterpillar expects full-year 2026 gross sales and income development between 5% to 7% over the earlier 12 months, in accordance with its presentation slides. The corporate can also be bracing for incremental tariff prices of $2.6 billion and restructuring prices between $300 million and $350 million.

Wall Avenue analysts got here away optimistic from the report. Whereas tariffs are “holding a lid” on margins, Caterpillar appears to be conservative about 2026 and the sturdy backlog creates some upside for 2027, Michael Feniger, a analysis analyst at Financial institution of America, mentioned in a quick. He additionally famous that energy and power is in a “candy spot” as Caterpillar seems to be to get well the equipment facet of the enterprise.

Caterpillar can also be making a management change. Tony Fassino, president of the development phase, will retire at the end of May after 30 years with the corporate, in accordance with a information launch. Rod Shurman, who has been with Caterpillar since 1997, is scheduled to take over the place efficient Feb. 1.

With exception to Caterpillar’s roaring energy and power enterprise, Creed mentioned orders inside its development and mining segments could be inconsistent or “lumpy.”

“We’re blissful to see the orders that got here in,” he mentioned. “I do not know that you may depend on repeat each quarter of that.”