Heavy-equipment maker Caterpillar (CAT) is set to post fourth quarter results on Thursday, before markets open.
Wall Street expects the construction and mining equipment maker to post EPS of $4.71, implying a decline of 8.4%, while revenue is expected to increase nearly 10% to $17.76 billion during the quarter.
Caterpillar has benefitted from the recent surge in demand for energy and transportation equipment used to power artificial intelligence data centers. Earlier in October, the company posted stronger-than-expected quarterly results, thanks to its energy and transportation unit, which has become its fastest-growing segment, outpacing the traditional construction and mining equipment operations.
However, the company, which is usually considered a bellwether for the global industrial economy, expects U.S. tariffs on imports to weigh more heavily on profits during the fourth quarter.
“With Q3 adjusted operating margin falling to 17.5% from 20.0% a year ago, I would closely monitor the performance of the construction and resources segments. These two segments dragged down the overall profitability of the company due to the impact of tariffs and the limited capacity to pass these costs to customers. From this perspective, management’s FY26 tariff costs guidance is the key item to monitor,” noted a recent Seeking Alpha analysis by Deep Value Investing.
Over the last two years, Irving, Texas-based Caterpillar has beaten EPS estimates 63% of the time and has beaten revenue estimates 38% of the time.
Over the last three months, EPS estimates have seen 15 upward revisions, compared to five downward revisions, while revenue estimates have been revised upwards 13 times versus no downward move.
Seeking Alpha analysts and Seeking Alpha’s Quant ratings are cautious and rated the stock a Hold. In contrast, Wall Street considers it a Buy.
The stock rose 59% last year, outperforming the over 16% rise in the S&P 500 Index.