August 6, 2026 - Caterpillar reported its strongest quarterly performance on record, with second-quarter sales and revenue climbing to $20.5 billion, a 24% increase from $16.6 billion a year earlier. The growth was fueled by rising demand for heavy construction equipment, power generation systems and mining machinery, supported by stronger equipment volumes, favorable pricing and improving dealer inventories.

The company also received a $392 million refund tied to revoked tariffs imposed under the International Emergency Economic Powers Act, providing an additional boost during the quarter.

AI data centers continue to fuel generator demand

Questions have recently emerged over whether the rapid expansion of AI data centers can be sustained after volatility in semiconductor stocks sparked concerns about future spending. Caterpillar executives, however, said customer demand remains robust.

Speaking during the company's earnings call, Chairman and CEO Joseph Creed said discussions with customers continue to be active and that the company has not seen any slowdown in AI-related investment.

Retail sales of Caterpillar's power generation business surged 72% year over year, driven largely by demand for large generator sets and gas turbines supplying electricity to hyperscale data centers.

The company said orders from customers in data centers, oil and gas, mining and marine markets now extend through 2030, with approximately 59% of its $72 billion order backlog scheduled for delivery within the next year.

To help satisfy growing demand, Caterpillar will restart production of its 10-megawatt medium-speed gas reciprocating engine, a platform that was discontinued in 2022 because of limited market opportunities. The company expects to restore 1.5 gigawatts of manufacturing capacity, with deliveries beginning in the fourth quarter.

Strong gains across business segments

Caterpillar's Power and Energy division generated $8.2 billion in revenue during the quarter, an increase of 17% from the same period last year. Operating profit climbed 30% to $2 billion.

The Construction Industries segment posted $8.3 billion in sales, up 35% year over year. North American demand exceeded expectations, with regional sales jumping 50% to nearly $5.1 billion. Segment profit rose 57% to $1.9 billion.

The company also began supplying equipment to Major Projects, its rental joint venture created to serve contractors working on large-scale infrastructure and industrial developments across North America. The initiative complements Caterpillar's traditional dealer rental network while simplifying equipment access for major construction customers.

In the mining business, Caterpillar completed its acquisition of Skycatch in July, adding AI-powered spatial mapping and data analysis technology to its portfolio. The Resource Industries segment, which includes mining and rail equipment, recorded $4.6 billion in revenue, up 20%, while profit increased 23% to $693 million.

Outlook improves despite tariff headwinds

Following the strong first half of the year, Caterpillar raised its full-year forecast and now expects mid-to-high teens sales and revenue growth compared with last year. Management said it plans to expand production capacity and increase manufacturing throughput during the remainder of the year.

Despite the improved outlook, the company continues to face significant tariff-related expenses. Chief Financial Officer Kyle Epley said Caterpillar expects approximately $2.2 billion in tariff costs for the full year, excluding any past or future refunds associated with the revoked IEEPA tariffs.