Construction equipment company Caterpillar beat revenue and earnings estimates last quarter, and has lifted its guidance due to lower expected tariff costs and strong data centre demand.
Earnings per share were US$5.54, up from $4.25 one year ago and above Zacks consensus estimates of $4.55. Revenue increased 22% to $17.42 billion, surpassing estimates by 5.95%.
“Our team delivered a strong start to the year, driven by resilient end markets and disciplined execution in a dynamic operating environment,” said Caterpillar Chairman and CEO Joe Creed.
“Solid sales and revenues growth, combined with robust order activity, demonstrate the strength of our business and our focus on solving our customers’ toughest challenges. A record backlog provides a strong foundation for continued positive momentum.”
Construction Industries revenue posted the largest percentage increase, rising 38% to $7.16 billion. Power and Energy revenue also rose 22% to $7.03 billion, driven in part by demand for generator sets and turbines used in data centres.
Operating profit grew 20% to $2.58 billion, which the company credited to higher sales volume and favourable price realisation.
The company’s order backlog was a record $62.7 billion last quarter, up from $27.7 billion one year ago.
Caterpillar forecasts full-year revenue percentage growth in the low double digits, it said, raised from its previous guidance of 7%.
It also expects tariff costs of $2.2-2.4 billion, falling from its prior guidance of $2.6 billion. Many United States tariffs were ruled unlawful by the Supreme Court in February, though other tariffs on materials like steel remain in place.
“We anticipate growth in power generation for both reciprocating engines and turbines, driven by increasing energy demand to support data centre build-out related to cloud computing and generative AI,” said Creed on an earnings call.
Caterpillar (NYSE: CAT) shares closed 9.9% higher at $890.11, but declined 0.2% after-hours. Its market capitalisation is $414.16 billion.
