Caterpillar Inc. reported third‑quarter 2025 results, posting revenue of $17.6 billion and adjusted earnings per share of $4.95, which exceeded consensus estimates of $4.52‑$4.57. GAAP earnings per share were $4.88, down 5% from $5.06 in the same quarter a year earlier.
Operating profit margin fell to 17.3% from 19.5% in Q3 2024, while sales volume increased 10% to $17.6 billion. The Energy & Transportation segment generated $8.397 billion in sales, up 17% year‑over‑year, driven by robust demand for power‑generation engines and oil‑and‑gas turbines, particularly for data‑center power.
Construction Industries sales rose 7% to $6.76 billion, but profit fell 7% to $1.38 billion. Resource Industries sales grew 2% to $3.10 billion, with profit declining 19% to $499 million. Caterpillar reported a record backlog of $39.8 billion.
CEO Joe Creed said the company’s full‑year outlook had improved, raising sales and revenue guidance modestly. Adjusted operating profit margin is expected near the lower end of the target range when tariffs are included, but in the top half of the range excluding tariffs. Tariff impact guidance is $400‑$500 million for Q3 and $650‑$800 million for Q4, translating to a full‑year impact of $1.6‑$1.75 billion.
Morgan Stanley analyst Angel Castillo noted the earnings beat and positive outlook, raising the price target to $650. JPMorgan analyst Tami Zakaria lifted the target to $650, citing data‑center demand and margin discipline. UBS analyst Steven Fisher increased the target to $506, Truist analyst Jamie Cook raised it to $582, and Citigroup analyst Kyle Menges moved it to $540. All analysts highlighted the company’s stronger backlog and improved Energy & Transportation performance as key drivers.
Additional context: The surge in AI data‑center demand has become a significant driver for Caterpillar’s Energy & Transportation segment. The company’s stock has risen more than 45% year‑to‑date, reflecting investor confidence in its role in the AI infrastructure build‑out. On October 12, Caterpillar announced the acquisition of Australia‑based RPMGlobal Holdings Limited for AUD 1.12 billion ($733 million).
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