Caterpillar posted $20.5 billion in second-quarter sales and revenue, a 24 percent jump from $16.6 billion a year earlier, with the beat powered by a 72 percent surge in power generation retail sales tied to data center demand. The record quarter arrives as chip stocks sell off on doubts about AI infrastructure payback, yet Caterpillar’s order book shows hyperscalers and energy customers placing commitments through 2030.
Power generation leads the beat
The power and energy segment delivered $8.2 billion in sales, up 17 percent, with segment profit climbing 30 percent to $2 billion. Chief executive Joseph Creed said the strength came from “very strong demand for large gen sets and turbines used in data center applications.” The company is restarting production of its 10-megawatt medium-speed gas reciprocating engine platform, halted in 2022 for “limited industry opportunity”, targeting 1.5 gigawatts of capacity with shipments beginning in the fourth quarter.
Construction surprises in North America
Construction segment sales rose 35 percent to $8.3 billion, driven by a 50 percent jump in North America to nearly $5.1 billion. Segment profit increased 57 percent to $1.9 billion. Caterpillar also began delivering equipment to Major Projects, a rental joint venture for multibillion-dollar North American projects, supplementing existing dealer rental channels.
Backlog stretches to 2030
The $72 billion order backlog has 59 percent slated for delivery within 12 months, spanning data centers, oil and gas, mining and marine. Resource industries sales reached $4.6 billion, up 20 percent, with profit up 23 percent to $693 million. The July acquisition of Skycatch adds AI-driven spatial data software for mining operations.
Guidance raised, tariff bill looms
Full-year sales growth guidance moved to the “mid-to-high teens” despite geopolitical uncertainty. Chief financial officer Kyle Epley flagged $2.2 billion in expected tariff costs for the year, excluding any IEEPA refunds, the company already booked a $392 million refund from revoked tariffs this quarter. Capacity expansion and throughput increases are planned for the second half.