Caterpillar delivered one of its strongest third quarters on record, powered by data center buildouts as orders across power generation, construction and mining continued to grow.
“Our third quarter results reflect the durability of our end markets, with our highest sales quarter ever, strong order rates and a record backlog,” Caterpillar CEO Joseph Creed said in a Q3 earnings call Thursday morning.
The heavy machinery maker saw its backlog reach $78 billion, nearly double what it was a year ago. Caterpillar has taken steps to expand production of its large reciprocating engines and turbines, while increasing capacity, to meet surging demand for data center customers, Creed said.
“The team is effectively managing the operational challenges that come with this rapid growth,” he said.
Power and energy
Caterpillar’s power and energy division, which manufactures gas-powered engines and generators, led the way for the company during Q3. Sales totaled $8.8 billion, up 18% from the same period last year.
Most of the growth came from power generation sales, which increased 30% year over year and were fueled by data center customers, according to the report. Oil and gas sales also saw double-digit growth, driven by reciprocating engine aftermarket parts and engines used in gas compression applications.
The vast majority of external sales and revenue, approximately 82%, came from North America and the Europe-Middle East-Africa region. Sales declined in the Latin America and Asia-Pacific regions.
The segment turned a profit of $2.1 billion, up 31% from a year ago.
Construction industries
Caterpillar’s construction industries division, which manufactures bulldozers, excavators and other heavy machinery, saw higher sales across all of its geographic market regions during Q3.
Sales totaled nearly $8 billion, up 18% from the same period last year. North America led the way, comprising more than half of the company’s external sales, followed by the EMEA, Asia-Pacific and Latin America regions.
Higher volumes and prices offset unfavorable manufacturing costs, including the impact of higher freight and capacity expansion. Caterpillar last month said it will invest $1 billion to build a facility in Sanford, North Carolina, focused on compact construction equipment for small contractors and growing businesses.
The segment posted a profit of $1.8 billion, up 33% over last year.
Resource industries
Caterpillar’s resource industries division came in below expectations during Q3, in part due to mining shipment and commissioning delays, as well as lower locomotive deliveries, Creed said on the call.
Sales totaled $4.6 billion, up 15% from a year ago. However, Creed said sales to end users or retail customers increased just 4%. The vast majority of Caterpillar’s sales come from dealers and original equipment manufacturers.
The segment turned a profit of $622 million, up 14% over last year. Higher volumes and prices offset unfavorable manufacturing and material costs, including tariffs.
Tariffs and outlook
Caterpillar recognized $600 million in tariff costs during Q3, excluding International Emergency Economic Powers Act refunds that it claimed.
This was in line with last year but $200 million lower than what Caterpillar recorded in Q4 2025, CFO Kyle Epley said on the earnings call. Construction industries comprise about 50% of the tariffs total, while power and energy and resource industries each account for 25%.
Caterpillar expects “moderate sales growth” in Q4 over last year, as well as higher operating profit margins, according to Caterpillar’s earnings presentation. For the full year, the company forecasted “mid-to-high teens growth” versus 2025. It also expects full-year tariff costs to be about $2.2 billion, excluding IEEPA refunds, Epley said.
“We delivered another very strong quarter, with year-to-date financial results tracking toward another record year for Caterpillar,” he said. “Our end markets remain healthy with strong order rates and a growing backlog.”
