Caterpillar raises growth forecast as data centre build-out drives new orders, record revenue
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Excavator booms with the Caterpillar logo are displayed at a dealership in Londonderry, N.H.Charles Krupa/The Associated Press
Caterpillar CAT-N raised its annual revenue growth forecast after beating second-quarter profit estimates on Tuesday, benefiting from a build-out of AI data centres that has spurred demand for its power-generation and construction equipment.
Shares of the company jumped 10 per cent in premarket trading, sending Dow futures up 0.6 per cent, after it cut its full-year tariff costs forecast to around US$2.2-billion from the previously expected US$2.2-billion to US$2.6-billion.
Over the last few quarters, the equipment giant has seen a surge in orders for construction equipment amid a nationwide buildout of data centres as well as the backup power equipment needed for such buildings.
Caterpillar’s results are often seen as a bellwether for the industrial economy. Its quarterly earnings beat and raised outlook likely signal that the AI-led demand boom for ancillary equipment is sustainable.
In the April-to-June quarter, Caterpillar said it booked orders worth US$9.4-billion, taking its order backlog to a record US$72.1-billion.
Its overall revenue grew 24 per cent to an all-time high of US$20.54-billion in the quarter ending June 30.
Core construction segment revenue grew 35 per cent in that period on strong retail sales, particularly in top market North America, where it recorded a 50-per-cent jump.
The power and energy arm, meanwhile, posted 17-per-cent growth in revenue. The two segments accounted for a combined 81 per cent of Caterpillar’s total revenue.
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The company builds power generators and backup power equipment under its power & energy segment, while its construction industries segment manufactures excavators and bulldozers.
Caterpillar also said it recorded an expected tariff recovery of US$392-million in the second quarter.
It reported adjusted per-share profit of US$8.17, compared with US$4.72 per share a year earlier, well above analysts’ expectation of US$6.20 per share, according to data compiled by LSEG.
