Caterpillar Stock Soars Most Since 2009. What Earnings Revealed About Its AI Future.

Investors would like to see some positive momentum in Caterpillar’s construction sales and mining business. (Justin Sullivan/Getty Images)

Key Points

• Caterpillar reports third-quarter adjusted earnings per share of $4.95 from sales of $17.6 billion. Wall Street was looking for earnings per share of $4.52 from sales of $16.8 billion.
• Reported sales grow for the first time since the fourth quarter of 2023.

Caterpillar stock faced high expectations coming into the company’s third-quarter earnings report. It plowed right through them thanks to a boost from the construction of data centers for artificial intelligence.

Cat reported adjusted earnings per share of $4.95 from sales of $17.6 billion. Wall Street was looking for earnings per share of $4.52 from sales of $16.8 billion, according to FactSet.

A year ago, in the third quarter of 2024, Caterpillar reported EPS of $5.17 from sales of $16.1 billion. Reported sales grew for the first time since the fourth quarter of 2023, when slowing construction markets started to impact sales.

Caterpillar stock was up 12% at $588.04 at 10 a.m., on track for its largest one-day gain since March 4, 2009, when it rose 13%, and a record high. The S&P 500 and Dow Jones Industrial Average were up 0.3% and 0.5%, respectively.

“Solid performance from our team generated strong results this quarter, driven by resilient demand and focused execution across our three primary segments,” said Caterpillar CEO Joe Creed in a news release. “Our team’s continued discipline in a dynamic environment, coupled with a growing backlog, positions us for sustained momentum and long-term profitable growth.”

Construction sales rose 7% year over year to $6.8 billion. Growth is good. Residential construction markets have been weak, wrote Baird analyst Mig Dobre in a preview report, adding, however, that commercial construction markets showed signs of stabilization. Cat’s total construction sales in the second quarter were $6.2 billion, down 7% year over year.

Mining-related sales were $3.1 billion, up 2% year over year. Sales were $3.1 billion in the second quarter, down 4% year over year.

The standout division for the company lately has been its energy and transportation segment, which includes generators for things such as artificial-intelligence data centers. Sales in the second quarter were $8.4 billion, up 17% year over year.

“Order strength continued, up 25% year over year,” wrote Raymond James analyst Tim Thein in a Wednesday report, adding that strength in power generation helped Cat increase expectations for full-year sales.

Cat now sees 2025 sales up “modestly” compared with 2024. It’s prior outlook was for “slightly” higher sales. Cat started the year expecting “slightly lower” sales. (Wall Street was ahead of management, forecasting about a 2% sales increase this year.)

Third-quarter operating profit landed at $3.1 billion, down almost $100 million year over year, with higher costs from tariffs offsetting benefits from higher volumes.

Things are getting better for Cat—they need to. Coming into Wednesday trading, Caterpillar shares were up 45% year to date, showing investors expected improving business momentum.

Options markets implied shares would move about 4% up or down following earnings. Cat stock has moved an average of about 2% following the past four quarterly reports. Shares rose twice and fell twice over that span.

Write to Al Root at allen.root@dowjones.com