Caterpillar posted record sales of $20.5 billion during the second quarter of 2026, according to earnings results reported by Utility Dive. The Texas-based manufacturer saw surging demand for bulldozers, power generators, and other industrial equipment across all three of its main business lines. The company's performance comes as investors question whether artificial intelligence spending can sustain its current pace.
Sales and revenue jumped 24% compared to $16.6 billion in the same quarter last year, driven by higher volumes and favorable pricing, the company reported. Power generation retail sales surged 72% year-over-year during the quarter. The power and energy segment brought in $8.2 billion in sales, a 17% increase from last year, while segment profit climbed 30% to $2 billion. Construction segment sales totaled $8.3 billion, up 35% from a year earlier, with North American regional sales soaring 50% to nearly $5.1 billion. Construction segment profit rose 57% to $1.9 billion. The resource industries segment, which covers mining and rail equipment, recorded $4.6 billion in sales, up 20%, with profit reaching $693 million, a 23% increase. Caterpillar's order backlog now stands at $72 billion, with power and energy customers placing orders through 2030.
CEO and Chairman Joseph Creed addressed concerns about slowing AI infrastructure investments during the company's Tuesday earnings call, saying there are ongoing customer conversations but "no one is slowing down at the moment." Power generation growth stemmed from "very strong demand for large gen[erator] sets and turbines used in data center applications," Creed said. The company is restarting production of its 10-MW medium-speed gas reciprocating engine platform, which it stopped making in 2022 due to "limited industry opportunity," to meet current demand. Caterpillar plans to bring back 1.5 gigawatts of capacity with shipments starting in the fourth quarter.
The record quarter reflects momentum across multiple industries beyond data centers, according to the earnings report. Oil and gas, mining, and marine customers are also making large engine and turbine purchases alongside hyperscale cloud providers. Dealer inventory changes turned positive in North America, and backlog orders continue growing from data center and oil and gas clients. The company also received a $392 million refund related to revoked International Emergency Economic Powers Act tariffs, which partially boosted results. In July, Caterpillar completed its acquisition of Skycatch, a provider of AI-driven spatial data software for mining. The company also began delivering its first construction equipment to Major Projects, a rental joint venture serving customers with multibillion-dollar projects across North America, which supplements existing dealer rental services.
Despite ongoing geopolitical uncertainty, Caterpillar raised its full-year outlook and now expects sales and revenue growth in the "mid-to-high teens" compared to last year. The company plans to expand capacity and increase throughput in the second half of 2026, Creed said. However, CFO Kyle Epley warned that tariff costs will remain a headwind, with the company expecting $2.2 billion in tariff expenses for the year, excluding any received or upcoming IEEPA refunds. About 59% of the company's $72 billion order backlog is expected to be delivered over the next 12 months.