Caterpillar Inc. (CAT) shares rose 3.8% in premarket trading Thursday after the company reported quarterly results that beat Wall Street expectations, helped by strength in its power and energy business as data center demand lifted power generation sales.
The maker of heavy machinery said fourth-quarter sales and revenues rose to $19.1 billion, up 18% from $16.2 billion a year earlier, and above the consensus estimate of $17.76 billion. Earnings adjusted for one-time items were $5.16 a share, ahead of analysts’ expectation for $4.71 a share.
Net income fell to $2.46 billion, or $5.12 a share, from $2.75 billion, or $5.78 a share.
Caterpillar (CAT) said operating profit margin was 13.9% in the quarter, down from 18.0% a year earlier, reflecting higher manufacturing costs and restructuring charges. Adjusted operating profit margin was 15.6%, compared with 18.3% in the year-earlier period.
“Our centennial year marked a significant milestone, underscored by the highest full-year sales and revenues in Caterpillar’s history and a single-quarter record of $19.1 billion,” Chief Executive Joe Creed said in the earnings release.
Power & energy growth led by data center engines
Caterpillar Inc. (CAT) said power and energy sales climbed 23% to $9.4 billion. Within that segment, power generation revenue jumped 44% to $3.24 billion, driven by higher sales of large reciprocating engines that the company said were primarily tied to data-center applications. The segment also benefited from higher turbine and turbine-related services sales, along with gains in oil and gas.
Power and energy segment profit rose 25% to $1.84 billion, with Caterpillar (CAT) citing higher sales volume and favorable price realization, partly offset by higher manufacturing costs that it said primarily reflected the impact of higher tariffs.
Caterpillar (CAT) said consolidated sales were higher across its three primary segments. Construction Industries sales rose 15% to $6.93 billion, Resource Industries increased 13% to $3.35 billion and Power & Energy led the gains.
Margins pressured by tariffs and restructuring costs
Operating profit for Caterpillar (CAT) fell 9% to $2.66 billion. The company said the decline was driven by unfavorable manufacturing costs of $1.03 billion and higher restructuring costs of $282 million, partly offset by the profit impact of higher sales volume.
Caterpillar (CAT) said higher restructuring costs were mainly related to write-downs in the value of inventory in its rail division.
Full-year results set a record
For 2025, the company posted full-year sales and revenues of $67.6 billion, up 4% from $64.8 billion in 2024. Profit per share was $18.81, down from $22.05, while adjusted profit per share was $19.06, down from $21.90.
Caterpillar (CAT) generated enterprise operating cash flow of $11.7 billion during the year and ended 2025 with $10.0 billion of enterprise cash. The company deployed $7.9 billion for share repurchases and dividends, including $5.2 billion of buybacks and $2.7 billion of dividends.
“With a record backlog, we enter the new year with strong momentum and a continued focus on delivering long-term value for our customers and shareholders,” Creed said.