Caterpillar posted $20.5 billion of second-quarter sales, a record driven by a 72 percent jump in power-generation revenue as hyperscalers order generator sets and turbines through 2030. The quarter puts hard equipment numbers behind the AI infrastructure narrative that sent chip stocks reeling last week.
Generators are the new picks and shovels
Power and energy segment sales reached $8.2 billion, up 17 percent, with segment profit climbing 30 percent to $2 billion. Chief Executive Joseph Creed said customers are placing orders through 2030 and that 59 percent of the $72 billion backlog is slated for delivery in the next twelve months. The company is restarting production of its 10-megawatt medium-speed gas reciprocating engine, a line it mothballed in 2022 for “limited industry opportunity”, aiming to ship 1.5 gigawatts of capacity starting in the fourth quarter.
Construction surprises to the upside
Construction industries sales hit $8.3 billion, a 35 percent increase, as North American revenue surged 50 percent to nearly $5.1 billion. Segment profit rose 57 percent to $1.9 billion. Caterpillar also began delivering equipment to Major Projects, a rental joint venture targeting multibillion-dollar North American contracts, supplementing its existing dealer rental network.
Tariffs and guidance
Resource industries, comprising mining and rail, contributed $4.6 billion in sales, up 20 percent, with profit up 23 percent to $693 million. The company raised full-year sales guidance to “mid-to-high teens” growth despite flagging $2.2 billion in tariff costs for the year, excluding any IEEPA refunds. Creed’s assessment of AI demand: “no one is slowing down at the moment.”