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Caterpillar Inc. has increased its annual and long-term revenue forecasts, supported by strong demand from AI-led data centre expansion and infrastructure development. Growth in its power generation and construction segments has driven higher sales, while its order backlog reached a record USD 62.7 billion. The company also reported better-than-expected quarterly results, with revenue and profit surpassing market estimates. At the same time, it lowered the expected financial impact from tariffs after policy changes. The performance highlights Caterpillar’s role as a key indicator of global industrial activity.
Caterpillar Inc. has raised its revenue outlook for the year and the long term, supported by rising demand linked to artificial intelligence-driven data centre expansion. The company indicated that the growing need for power generation and backup systems has significantly strengthened its order pipeline, with total backlog reaching a record USD 62.7 billion by the end of the March quarter. Advertisement
The company’s shares rose nearly 9.7% during the past week, touching a record high and marking one of its strongest single-day performances in recent months. This reflects investor confidence in sustained demand across its key business segments.
Its power and energy division, along with the construction segment, continued to drive overall performance. Increased investments by technology firms in building data centres and related infrastructure have resulted in higher equipment demand. CEO Joe Creed stated during a post-earnings interaction that investments in critical infrastructure programmes and data centres were contributing to overall construction spending levels.
Caterpillar now expects its power generation equipment sales to triple by 2030 compared to 2024 levels, a higher projection than its earlier estimate of doubling over the same period. This revision highlights the scale of demand emerging from AI-led infrastructure.
For the full year, the company expects revenue growth in the low double-digit percentage range, an increase from its earlier projection of around 7%. It has also revised its long-term annual revenue growth outlook for the 2024–2030 period to 6–9%, compared to the previous 5–7% range.
The construction business reported a 38% rise in revenue to USD 7.16 billion, mainly due to higher dealer sales in North America, which remains its largest market. Meanwhile, the power and energy segment recorded a 22% increase, reaching USD 7.03 billion.
During the January–March quarter, Caterpillar posted earnings of USD 5.54 per share, exceeding analyst expectations of USD 4.62 per share. Total revenue grew 22% to USD 17.42 billion, marking its strongest growth in over four years and surpassing estimates of USD 16.61 billion.
The company noted that higher sales volumes and improved pricing supported its performance, although these gains were partly offset by increased manufacturing costs of around USD 710 million, largely due to tariffs.
Caterpillar has revised its expected tariff impact for the year to between USD 2.2 billion and USD 2.4 billion, lower than its earlier estimate of USD 2.6 billion. It expects tariff-related costs of about USD 700 million in the second quarter.
Incoming CFO Kyle Epley explained that the reduced tariff impact was due to a shift to Section 232 levies following a ruling by the Supreme Court of the United States that struck down tariffs imposed under the International Emergency Economic Powers Act by former President Donald Trump.
Tariffs have remained a challenge for U.S. industrial companies, increasing the cost of imported raw materials and production equipment over the past few years.
Caterpillar’s performance is often viewed as a reflection of broader global industrial activity. The current growth, supported by AI-related infrastructure and steady construction demand, indicates continued momentum in key sectors despite cost pressures.
Source Reuters
5th Jun, 2025
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