Caterpillar (NYSE:CAT) Posts Quarterly Earnings Results, Beats Estimates By $0.14 EPS

Caterpillar (NYSE:CAT) announced its earnings results on Thursday. The industrial products company reported $7.20 EPS for the quarter, topping the consensus estimate of $7.06 by $0.14, FiscalAI reports. Caterpillar had a net margin of 15.21% and a return on equity of 59.87%. The company had revenue of $20.68 billion for the quarter, compared to analysts’ expectations of $20.76 billion. During the same period last year, the firm earned $4.95 earnings per share. The business’s revenue for the quarter was up 17.3% on a year-over-year basis.

Here are the key takeaways from Caterpillar’s conference call:

• Record third-quarter performance: Sales and revenues rose 17% to $20.7 billion, while adjusted profit per share increased 45% to $7.20. Caterpillar said strong volume and favorable pricing drove results across its three primary segments.
• Backlog and Power & Energy demand remain exceptionally strong: Backlog reached a record $78 billion, up 96% year over year, with large reciprocating-engine orders extending into 2029 and turbine orders into 2030. Data-center, cloud-computing, AI, prime-power, and oil-and-gas demand are supporting growth, although capacity remains the key constraint.
• Full-year outlook was maintained: Caterpillar continues to expect 2026 sales growth in the mid-to-high teens and MP&E free cash flow in the top half of its $6 billion-$15 billion target range. However, excluding tariff recoveries, adjusted operating margin is expected near the bottom of its target range because of tariffs, freight, capacity-expansion costs, and higher investment spending.
• Fourth-quarter growth will face a difficult comparison and inventory headwind: The company expects moderate year-over-year sales growth, with Construction Industries dealer inventory projected to decline about $1.6 billion, creating an approximately $1 billion volume headwind versus the prior year. Capacity ramp-up and operational challenges also limit near-term growth in Power & Energy and Resource Industries.
• Cash generation and customer credit quality remain strong: Third-quarter MP&E free cash flow was $3.8 billion, and Caterpillar returned $2 billion to shareholders through buybacks and dividends. Cat Financial reported past-due accounts of just 1.31%, the lowest level recorded since 1998, while strategic investments are expanding engine, compact-equipment, and autonomous-hauling capacity.

Caterpillar Trading Down 3.8%

Shares of Caterpillar stock traded down $24.66 on Friday, hitting $622.73. 5,299,167 shares of the company’s stock traded hands, compared to its average volume of 3,038,514. The company has a market capitalization of $286.25 billion, a price-to-earnings ratio of 24.43, a price-to-earnings-growth ratio of 1.11 and a beta of 1.58. Caterpillar has a one year low of $537.08 and a one year high of $1,073.46. The company has a fifty day moving average of $783.25 and a two-hundred day moving average of $807.52. The company has a debt-to-equity ratio of 1.50, a current ratio of 1.42 and a quick ratio of 0.85.

Caterpillar Dividend Announcement

The firm also recently disclosed a quarterly dividend, which will be paid on Thursday, November 19th. Stockholders of record on Monday, October 26th will be paid a $1.63 dividend. This represents a $6.52 dividend on an annualized basis and a dividend yield of 1.0%. The ex-dividend date of this dividend is Monday, October 26th. Caterpillar’s payout ratio is currently 25.58%.

Analyst Upgrades and Downgrades

Several equities research analysts recently weighed in on CAT shares. Freedom Broker raised shares of Caterpillar from a “hold” rating to a “buy” rating and set a $980.00 price objective for the company in a research report on Thursday, September 10th. JPMorgan Chase & Co. decreased their target price on shares of Caterpillar from $1,100.00 to $1,000.00 and set an “overweight” rating on the stock in a report on Friday. Erste Group Bank cut Caterpillar from a “buy” rating to a “hold” rating in a report on Monday, July 27th. Truist Financial reaffirmed a “buy” rating and issued a $1,027.00 price objective (down from $1,100.00) on shares of Caterpillar in a research note on Friday. Finally, UBS Group decreased their target price on Caterpillar from $925.00 to $750.00 and set a “neutral” rating on the stock in a research report on Monday, October 26th. Fifteen equities research analysts have rated the stock with a Buy rating and twelve have given a Hold rating to the company’s stock. Based on data from MarketBeat, the stock presently has an average rating of “Moderate Buy” and a consensus price target of $913.96.

Key Headlines Impacting Caterpillar

Here are the key news stories impacting Caterpillar this week:

• Positive Sentiment: Caterpillar reported third-quarter sales and revenues of approximately $20.7 billion, up 17% year over year, while adjusted earnings per share of $7.20 exceeded the $7.06 consensus estimate. Power-generation sales increased 30%, helped by data-center demand, and the company reported a record $78.1 billion backlog. Caterpillar Reports Third-Quarter 2026 Results
• Positive Sentiment: Truist Financial reaffirmed its “buy” rating, while Citigroup maintained a “buy” rating despite lowering its price target to $800. Both targets remain above the current trading level, suggesting some analysts see substantial long-term upside.
• Neutral Sentiment: Bank of America said Caterpillar’s earnings power remains intact, and analysts expect revenue and EPS growth as the backlog converts. However, the backlog may extend into 2029–2030, meaning investors could wait longer for the full financial benefit.
• Negative Sentiment: Management left its annual growth outlook unchanged and indicated only “moderate” fourth-quarter revenue growth. Investors had expected a stronger forecast or an upgrade, so the unchanged guidance overshadowed the earnings beat. Caterpillar Tops Quarterly Profit View
• Negative Sentiment: Revenue came in slightly below consensus, while tariff expenses and rising inventories added to concerns about costs, demand timing and near-term margins.
• Negative Sentiment: Several firms reduced their targets: Morgan Stanley cut its target to $675 and rated CAT “equal weight,” RBC lowered its target to $722 with a “sector perform” rating, and Truist reduced its target to $1,027. These cuts reinforce concerns that the stock’s premium valuation had become difficult to justify without faster growth.

Insider Transactions at Caterpillar

In other Caterpillar news, CEO Joseph E. Creed sold 32,401 shares of the firm’s stock in a transaction that occurred on Friday, August 28th. The stock was sold at an average price of $808.98, for a total value of $26,211,760.98. Following the completion of the sale, the chief executive officer owned 34,555 shares of the company’s stock, valued at approximately $27,954,303.90. This trade represents a 48.39% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is accessible through this hyperlink. Insiders own 0.33% of the company’s stock.

Caterpillar Company Profile

Caterpillar Inc is a manufacturer of construction, mining, and industrial equipment. Its product portfolio includes excavators, bulldozers, wheel loaders, motor graders, articulated trucks, and other machinery used in construction, infrastructure development, mining, quarrying, forestry, and related industries. The company also produces diesel and natural gas engines, industrial gas turbines, generator sets, and other power-generation and transportation equipment.

Caterpillar operates through businesses focused on construction industries, resource industries, and energy and transportation.