Caterpillar reported second-quarter revenue exceeding $20 billion for the first time in its history, a strong performance that caught short sellers off guard and sent shares sharply higher.
Before the U.S. market opened on August 4, Caterpillar released its second-quarter earnings, showing a 24% year-over-year revenue surge to $20.54 billion, marking the company's first-ever quarterly revenue above $200 billion and significantly beating market expectations. Net profit soared 65% to $3.59 billion, with adjusted earnings per share of $8.17, approximately 31% above consensus estimates, the largest beat since the first quarter of 2021. The company also raised its full-year revenue growth guidance, upgrading it from "low double-digit" growth to "mid-to-high double-digit" growth. CEO Joe Creed stated in a press release: "This is the first time in our company's history that we have generated over $20 billion in sales and revenue in a single quarter. This milestone reflects the essential work our customers do every day and the dedication of Caterpillar employees to solving our customers' toughest challenges." He also noted that strong order rates and a growing backlog signal accelerating momentum across all three major segments.
Buoyed by the results, Caterpillar shares jumped over 12% at the open, later paring gains to close up about 7%, making it the top gainer in the Dow Jones Industrial Average. As reported by Wall Street, just a month ago, Michael Burry, the inspiration for the film "The Big Short," announced a short position on Caterpillar at $1,060.98, arguing that its valuation as a beneficiary of AI infrastructure investment had become severely inflated. The strong rebound in Caterpillar has put pressure on this short position.
All three major business segments exceeded expectations, with energy and construction sectors driving results. In the second quarter, all three core business divisions of Caterpillar surpassed analyst forecasts, with data center-related demand playing a consistent role. Energy and power segment sales rose 17% year-over-year to $8.24 billion, beating the $7.77 billion estimate, driven by large engines, turbines, and related services, which are primarily used for data center power supply and infrastructure. Construction industry revenue jumped 35% to $8.35 billion, exceeding the $7.49 billion forecast, as the company noted that data center investments boosted overall construction spending. Resource industry sales increased 20% to $4.65 billion, also above the $4.17 billion estimate. Combined machinery, power, and energy revenue rose 25% to $19.58 billion, with operating profit surging 51% to $4.21 billion, well above the market estimate of $3.5 billion. Financial products segment operating profit grew 24% to $263 million, slightly above expectations, though its $962 million in revenue fell just short of analyst projections. Research and development spending increased 12% to $616 million.
The strong performance boosted the company's confidence in its full-year outlook, prompting an upward revision of its growth forecast. Management raised the full-year revenue growth guidance from "low double-digit" percentage growth to "mid-to-high double-digit" percentage growth. Currently, the Bloomberg consensus for 2026 full-year revenue stands at $77.01 billion, implying a year-over-year increase of about 13.9%, but the company's new guidance suggests actual growth could be significantly higher.
Despite a roughly 18% pullback from its all-time closing high of $1,064.90 on June 30, Caterpillar shares are still up 51.8% year-to-date, dramatically outperforming the S&P 500's 12.1% gain, making it one of the strongest large-cap stocks in 2026. Before this quarterly report, the stock experienced a volatile period. Last month, it fell about 23%, its worst monthly performance since 2009, triggered by concerns over the sustainability of data center capital expenditures, which led to a broad selloff in power equipment stocks. In this context, Michael Burry disclosed on July 1 that he had shorted Caterpillar at $1,060.98, citing that the company's price-to-sales ratio had climbed to its highest level in at least 30 years, signaling a valuation bubble risk. In a Substack post, he wrote, "This is my first time shorting Caterpillar. In the past, I made good money going long on this stock." He also characterized the large-scale spending plans announced by South Korea as "the beginning of the end for this rally." However, Caterpillar countered with a historic quarterly report, putting significant short-term pressure on his short position.
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