◆ Inside the Latest Quarter (Q2 2026)

Caterpillar (CAT) — the variant view

Caterpillar's first $20 billion quarter was real, but $392 million of its operating profit was a tariff refund that will not recur.

📈 CAT valuation, revenue & earnings — P/E, P/S, revenue, EPS →

The second quarter of 2026 was the biggest in Caterpillar's history. Sales and revenues were $20,543 million, up 24%, and the chief executive called it "the first time in company history that we have generated over $20 billion in sales and revenues in a single quarter"1. Volume added $3.1 billion and price $595 million2.

Q2 2026 total sales by segment ($M)8,346Construction Industries8,238Power & Energy4,648Resource Industries1,145Financial ProductsCaterpillar Q2 2026 results release
Construction and power level at the top.

Profit rose faster. Operating profit margin was 20.9%, against 17.3% a year earlier, and profit per share was $7.77 against $4.623. But operating profit included $392 million of expected IEEPA tariff recoveries4, and the outlook assumes no more in the second half5.

All three machine segments grew. Construction Industries' sales rose 35% to $8,346 million with a 23.3% margin; Power & Energy's 17% to $8,238 million with a 24.6% margin; Resource Industries' 20% to $4,648 million with a 14.9% margin6. Financial Products' revenues rose 10% to $1,145 million7.

The backlog grew $9.4 billion in the quarter to about $72.1 billion, with the largest increase in Power & Energy8. Dealer inventory rose $600 million, including $400 million in Construction Industries9.

Cash went back to owners: $1.5 billion of repurchases and $0.7 billion of dividends10. The company now expects 2026 sales and revenues to grow in the mid-to-high teens11.

Every segment's profit rose faster than its sales. Construction Industries' segment profit was $1,947 million against $1,244 million, up 57%; Resource Industries' $693 million against $563 million; Power & Energy's $2,027 million against $1,554 million; and Financial Products' $328 million against $248 million12. The quarter also carried a $139 million charge for the divestiture of certain non-U.S. entities, with no related tax benefit13.

Cash flow was strong too. Enterprise operating cash flow was $4.4 billion in the quarter, and the company ended it with $6.7 billion of cash14. Management said MP&E free cash flow for 2026 should be in the top half of its annual target range15.

The quarter's weak spot was the refund. Without it the margin would have been lower, and the third quarter carries around $600 million of tariff costs16. The third-quarter operating margin, reported on 28 October, is the check: holding near 20% without a refund would show the underlying business is as strong as the headline.

References
  1. ReportedSales and revenues were $20,543 million, up 24%, and the chief executive called it "the first time in company history that we have generated over $20 billion in sales and revenues in a single quarter".
    Caterpillar second-quarter 2026 results release, Form 8-K exhibit 99.1 - consolidated results, cash deployment and the CEO's statement. — Q2 2026 · publ. 4 August 2026 · source ↗
  2. ReportedVolume added $3.1 billion and price $595 million.
    Caterpillar second-quarter 2026 results release, Form 8-K exhibit 99.1 - consolidated results, cash deployment and the CEO's statement. — Q2 2026 · publ. 4 August 2026 · source ↗
  3. ReportedOperating profit margin was 20.9%, against 17.3% a year earlier, and profit per share was $7.77 against $4.62.
    Caterpillar second-quarter 2026 results release, Form 8-K exhibit 99.1 - consolidated results, cash deployment and the CEO's statement. — Q2 2026 · publ. 4 August 2026 · source ↗
  4. ReportedBut operating profit included $392 million of expected IEEPA tariff recoveries, and the outlook assumes no more in the second half.
    Caterpillar second-quarter 2026 results release, Form 8-K exhibit 99.1 - consolidated results, cash deployment and the CEO's statement. — Q2 2026 · publ. 4 August 2026 · source ↗
  5. ReportedBut operating profit included $392 million of expected IEEPA tariff recoveries, and the outlook assumes no more in the second half.
    Caterpillar Form 10-Q for the quarter ended 30 June 2026 - backlog, outlook, tariffs, dealer inventory, balance sheet and the RPMGlobal acquisition - MD&A: order backlog, dealer inventory, tariffs, IEEPA recoveries and the 2026 outlook. — Q2 2026 · publ. 5 August 2026 · source ↗
  6. ReportedConstruction Industries' sales rose 35% to $8,346 million with a 23.3% margin; Power & Energy's 17% to $8,238 million with a 24.6% margin; Resource Industries' 20% to $4,648 million with a 14.9% margin.
    Caterpillar second-quarter 2026 results release, Form 8-K exhibit 99.1 - segment results and Cat Financial credit. — Q2 2026 · publ. 4 August 2026 · source ↗
  7. ReportedFinancial Products' revenues rose 10% to $1,145 million.
    Caterpillar second-quarter 2026 results release, Form 8-K exhibit 99.1 - segment results and Cat Financial credit. — Q2 2026 · publ. 4 August 2026 · source ↗
  8. ReportedThe backlog grew $9.4 billion in the quarter to about $72.1 billion, with the largest increase in Power & Energy.
    Caterpillar Form 10-Q for the quarter ended 30 June 2026 - backlog, outlook, tariffs, dealer inventory, balance sheet and the RPMGlobal acquisition - MD&A: order backlog, dealer inventory, tariffs, IEEPA recoveries and the 2026 outlook. — Q2 2026 · publ. 5 August 2026 · source ↗
  9. ReportedDealer inventory rose $600 million, including $400 million in Construction Industries.
    Caterpillar Form 10-Q for the quarter ended 30 June 2026 - backlog, outlook, tariffs, dealer inventory, balance sheet and the RPMGlobal acquisition - MD&A: order backlog, dealer inventory, tariffs, IEEPA recoveries and the 2026 outlook. — Q2 2026 · publ. 5 August 2026 · source ↗
  10. ReportedCash went back to owners: $1.5 billion of repurchases and $0.7 billion of dividends.
    Caterpillar second-quarter 2026 results release, Form 8-K exhibit 99.1 - consolidated results, cash deployment and the CEO's statement. — Q2 2026 · publ. 4 August 2026 · source ↗
  11. ReportedThe company now expects 2026 sales and revenues to grow in the mid-to-high teens.
    Caterpillar Form 10-Q for the quarter ended 30 June 2026 - backlog, outlook, tariffs, dealer inventory, balance sheet and the RPMGlobal acquisition - MD&A: order backlog, dealer inventory, tariffs, IEEPA recoveries and the 2026 outlook. — Q2 2026 · publ. 5 August 2026 · source ↗
  12. ReportedConstruction Industries' segment profit was $1,947 million against $1,244 million, up 57%; Resource Industries' $693 million against $563 million; Power & Energy's $2,027 million against $1,554 million; and Financial Products' $328 million against $248 million.
    Caterpillar second-quarter 2026 results release, Form 8-K exhibit 99.1 - segment results and Cat Financial credit. — Q2 2026 · publ. 4 August 2026 · source ↗
  13. ReportedThe quarter also carried a $139 million charge for the divestiture of certain non-U.S. entities, with no related tax benefit.
    Caterpillar second-quarter 2026 results release, Form 8-K exhibit 99.1 - consolidated results, cash deployment and the CEO's statement. — Q2 2026 · publ. 4 August 2026 · source ↗
  14. ReportedEnterprise operating cash flow was $4.4 billion in the quarter, and the company ended it with $6.7 billion of cash.
    Caterpillar second-quarter 2026 results release, Form 8-K exhibit 99.1 - consolidated results, cash deployment and the CEO's statement. — Q2 2026 · publ. 4 August 2026 · source ↗
  15. ReportedManagement said MP&E free cash flow for 2026 should be in the top half of its annual target range.
    The Motley Fool, Caterpillar Q2 2026 earnings call transcript and summary - lead times, backlog delivery, rental demand, Wamego, the 10-megawatt engine restart and Skycatch. — Q2 2026 · publ. 11 August 2026 · source ↗
  16. ReportedWithout it the margin would have been lower, and the third quarter carries around $600 million of tariff costs.
    Caterpillar Form 10-Q for the quarter ended 30 June 2026 - backlog, outlook, tariffs, dealer inventory, balance sheet and the RPMGlobal acquisition - MD&A: order backlog, dealer inventory, tariffs, IEEPA recoveries and the 2026 outlook. — Q2 2026 · publ. 5 August 2026 · source ↗
Sources
Generated September 25, 2026