CATERPILLAR INC
For the period ended Jun 30, 2026. Filed Aug 5, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 5, 2026
CAT$558.63+0.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-06.
0000018230-26-000021
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-05.
0000018230-26-000046
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 223 previous paragraphs and 274 current paragraphs.
125 unchanged; 68 reworded; 62 added; 23 removed; 7 previous and 19 current paragraphs rearranged.
Tables are not compared: 16 previous and 23 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (62)
Current report
Highlights for the six months ended June 30, 2026 include:
Current report
•Total sales and revenues were $37.958 billion for the six months ended June 30, 2026, an increase of $7.140 billion, or 23 percent, compared with $30.818 billion for the six months ended June 30, 2025.
Current report
•Operating profit margin was 19.4 percent for the six months ended June 30, 2026, compared with 17.6 percent for the six months ended June 30, 2025. Adjusted operating profit margin was 20.1 percent for the six months ended June 30, 2026, compared with 17.9 percent for the six months ended June 30, 2025.
Current report
•Profit per share for the six months ended June 30, 2026, was $13.23, and excluding the items in the table below, adjusted profit per share was $13.70. Profit per share for the six months ended June 30, 2025, was $8.82, and excluding the item in the table below, adjusted profit per share was $8.97.
Current report
•Enterprise operating cash flow was $6.2 billion for the six months ended June 30, 2026.
Current report
Total sales and revenues for the second quarter of 2026 were $20.543 billion, an increase of $3.974 billion, or 24 percent, compared with $16.569 billion in the second quarter of 2025. The increase was primarily due to higher sales volumeof $3.1 billion and favorable price realization of $595 million.
Current report
We continue to see strong momentum in our end markets despite ongoing uncertainty due to geopolitical events. We are also progressing on our capacity expansion plans, and we expect to increase our throughput in the second half of 2026.
Current report
Excluding the expected IEEPA tariff recoveries in the second quarter of 2026, we now expect 2026 tariff costs of around $2.2 billion. Our outlook does not include any additional IEEPA tariff recoveries in the second half of 2026.
Current report
During the second quarter of 2026, CBP launched the CAPE system, which enabled the submission of certain IEEPA refund claims. For both the three and six months ended June 30, 2026, the company recorded $392 million of expected IEEPA tariff recoveries for claims submitted and accepted through the CAPE system. These recoveries were deemed probable and were recorded in Current assets: Receivables - trade and other within the Consolidated Statement of Financial Position and in Cost of goods sold within the Consolidated Statement of Results of Operations.
Current report
The company continues to assess the availability, timing and amounts of additional claim submissions for the remaining amounts paid under IEEPA, as these remain uncertain and were not deemed to be probable as of June 30, 2026.
Current report
Total sales and revenues for the second quarter of 2026 were $20.543 billion, an increase of $3.974 billion, or 24 percent, compared with $16.569 billion in the second quarter of 2025. The increase was primarily due to higher sales volume of $3.1 billion and favorable price realization of $595 million. Higher sales volume was mainly driven by higher sales of equipment to end users.
Current report
North America sales increased 39 percent due to higher sales volume and favorable price realization. The increase in sales volume was mainly driven by higher sales of equipment to end users.
Current report
Sales increased 10 percent in Latin America primarily due to higher sales volume. The increase in sales volume was mainly driven by higher sales of equipment to end users.
Current report
EAME sales increased 15 percent mainly due to higher sales volume and favorable currency impacts primarily related to the euro. Higher sales volume was mainly driven by higher sales of equipment to end users.
Current report
Sales increased 4 percent in Asia/Pacific primarily due to favorable currency impacts mainly related to the Australian dollar and favorable price realization.
Current report
Operating profit for the second quarter of 2026 was $4.295 billion, an increase of $1.435 billion, or 50 percent, compared with $2.860 billion in the second quarter of 2025. The increase was primarily due to the profit impact of higher sales volume.
Current report
Operating profit in the second quarter of 2026 included $392 million of expected IEEPA tariff recoveries.
Current report
Operating profit margin was 20.9 percent for the second quarter of 2026, compared with 17.3 percent for the second quarter of 2025.
Current report
In addition, the estimated annual effective tax rate in the second quarter of 2026 excluded the impact of second quarter losses of $139 million for the divestiture of certain non-U.S. entities with no related tax benefit.
Current report
•Oil and Gas – Sales increased in reciprocating engines used in gas compression applications and in reciprocating engine aftermarket parts, partially offset by lower sales of reciprocating engines used in well servicing applications. Sales also increased in turbines and turbine-related services.
Current report
Power & Energy’s segment profit was $2.027 billion in the second quarter of 2026, an increase of $473 million, or 30 percent, compared with $1.554 billion in the second quarter of 2025. The increase was mainly due to the profit impact of higher sales volume of $457 million and favorable price realization of $212 million, partially offset by unfavorable manufacturing costs of $149 million. Unfavorable manufacturing costs largely reflected increased period manufacturing costs.
Current report
Construction Industries’ total sales were $8.346 billion in the second quarter of 2026, an increase of $2.156 billion, or 35 percent, compared with $6.190 billion in the second quarter of 2025. The increase in sales was mainly due to higher sales volume of $1.8 billion and favorable price realization of $309 million. Higher sales volume was primarily driven by higher sales of equipment to end users.
Current report
Construction Industries’ segment profit was $1.947 billion in the second quarter of 2026, an increase of $703 million, or 57 percent, compared with $1.244 billion in the second quarter of 2025. The increase was primarily due to the profit impact of higher sales volume.
Current report
Construction Industries’ segment profit as a percent of total sales was 23.3 percent in the second quarter of 2026, compared with 20.1 percent in the second quarter of 2025.
Current report
Resource Industries’ total sales were $4.648 billion in the second quarter of 2026, an increase of $762 million, or 20 percent, compared with $3.886 billion in the second quarter of 2025. The increase was primarily due to higher sales volume. Higher sales volume was primarily driven by higher sales of equipment to end users.
Current report
Resource Industries’ segment profit was $693 million in the second quarter of 2026, an increase of $130 million, or 23 percent, compared with $563 million in the second quarter of 2025. The increase was mainly due to the profit impact of higher sales volume of $269 million, partially offset by unfavorable manufacturing costs of $158 million. Unfavorable manufacturing costs primarily reflected increased period manufacturing costs.
Current report
Resource Industries’ segment profit as a percent of total sales was 14.9 percent in the second quarter of 2026, compared with 14.5 percent in the second quarter of 2025.
Current report
Financial Products’ segment profit was $328 million in the second quarter of 2026, an increase of $80 million, or 32 percent, compared with $248 million in the second quarter of 2025. The increase was mainly due to favorable impacts from higher average earning assets of $44 million, equity securities at Insurance Services of $22 million and higher margins at Insurance Services of $21 million, partially offset by higher provision for credit losses at Cat Financial of $22 million.
Current report
In the second quarter of 2026, restructuring costs increased primarily due to the divestiture of certain non-U.S. entities.
Current report
SIX MONTHS ENDED JUNE 30, 2026 COMPARED WITH SIX MONTHS ENDED JUNE 30, 2025
Current report
CONSOLIDATED SALES AND REVENUES
Current report
The chart above graphically illustrates reasons for the change in consolidated sales and revenues between the six months ended June 30, 2025 (at left) and the six months ended June 30, 2026 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company’s board of directors and employees.
Current report
Total sales and revenues were $37.958 billion for the six months ended June 30, 2026, an increase of $7.140 billion, or 23 percent, compared with $30.818 billion for the six months ended June 30, 2025. The increase was primarily due to higher sales volume of $5.4 billion and favorable price realization of $1.0 billion. The increase in sales volume was mainly driven by higher sales of equipment to end users and the impact from changes in dealer inventories. Dealer inventory increased more during the six months ended June 30, 2026 than during the six months ended June 30, 2025.
Current report
Sales increased 7 percent in Latin America mainly due to higher sales volume. The increase in sales volume was primarily driven by higher sales of equipment to end users.
Current report
EAME sales increased 17 percent primarily due to higher sales volume and favorable currency impacts mainly related to the euro. The increase in sales volume was primarily driven by the impact from changes in dealer inventories. Dealer inventory increased more during the six months ended June 30, 2026, than during the six months ended June 30, 2025.
Current report
1 Includes revenues from Machinery, Power & Energy of $393 million and $335 million for the six months ended June 30, 2026 and 2025, respectively.
Current report
CONSOLIDATED OPERATING PROFIT
Current report
Operating profit for the six months ended June 30, 2026, was $7.380 billion, an increase of $1.941 billion, or 36 percent, compared with $5.439 billion for the six months ended June 30, 2025. The increase was primarily due to the profit impact of higher sales volume.
Current report
Operating profit for the six months ended June 30, 2026 included $392 million of expected IEEPA tariff recoveries.
Current report
Operating profit margin was 19.4 percent for the six months ended June 30, 2026, compared with 17.6 percent for the six months ended June 30, 2025.
Showing the first 40 of 62 passages. Open the source sections for the rest.
Removed paragraphs (23)
Previous report
Total sales and revenues for the first quarter of 2026 were $17.415 billion, an increase of $3.166 billion, or 22 percent, compared with $14.249 billion in the first quarter of 2025. The increase was primarily due to higher sales volumeof $2.3 billion and favorable price realization of $426 million.
Previous report
While there is increased uncertainty due to geopolitical events and elevated energy prices, our end markets have been resilient. We are closely monitoring the environment, and we are not forecasting a material impact to our 2026 outlook.
Previous report
Based on tariffs implemented since the beginning of 2025 and in place over the course of 2026, we expect tariff costs to be around $2.2 billion to $2.4 billion in 2026. We remain confident that we will manage the impact of tariffs over time.
Previous report
Sales increased 5 percent in Latin America due to favorable currency impacts primarily related to the Brazilian real and higher sales volume. The increase in sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory increased more during the first quarter of 2026 than during the first quarter of 2025.
Previous report
EAME sales increased 21 percent primarily due to higher sales volume and favorable currency impacts primarily related to the euro. Higher sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory increased during the first quarter of 2026 and remained about flat during the first quarter of 2025.
Previous report
Operating profit margin was 17.7 percent for the first quarter of 2026, compared with 18.1 percent for the first quarter of 2025.
Previous report
Power & Energy’s segment profit was $1.450 billion in the first quarter of 2026, an increase of $162 million, or 13 percent, compared with $1.288 billion in the first quarter of 2025. The increase was mainly due to the profit impact of higher sales volume of $435 million and favorable price realization of $108 million, partially offset by unfavorable manufacturing costs of $346 million. Unfavorable manufacturing costs primarily reflected the impact of higher tariff costs.
Previous report
Construction Industries’ total sales were $7.161 billion in the first quarter of 2026, an increase of $1.977 billion, or 38 percent, compared with $5.184 billion in the first quarter of 2025. The increase in sales was mainly due to higher sales volume of $1.5 billion and favorable price realization of $356 million. Higher sales volume was primarily driven by the impact from changes in dealer inventories. Dealer inventory increased during the first quarter of 2026, compared with a slight decrease during the first quarter of 2025.
Previous report
Construction Industries’ segment profit was $1.535 billion in the first quarter of 2026, an increase of $511 million, or 50 percent, compared with $1.024 billion in the first quarter of 2025. The increase was primarily due to the profit impact of higher sales volume of $505 million and favorable price realization of $356 million, partially offset by unfavorable manufacturing costs of $362 million. Unfavorable manufacturing costs largely reflected the impact of higher tariff costs.
Previous report
Construction Industries’ segment profit as a percent of total sales was 21.4 percent in the first quarter of 2026, compared with 19.8 percent in the first quarter of 2025.
Previous report
Resource Industries’ total sales were $3.797 billion in the first quarter of 2026, an increase of $136 million, or 4 percent, compared with $3.661 billion in the first quarter of 2025. The increase was primarily due to higher sales volume of $85 million and favorable currency impacts of $78 million mainly related to the Australian dollar. Higher sales volume was primarily driven by higher sales of equipment to end users.
Previous report
Resource Industries’ segment profit was $378 million in the first quarter of 2026, a decrease of $245 million, or 39 percent, compared with $623 million in the first quarter of 2025. The decrease was mainly due to unfavorable manufacturing costs. Unfavorable manufacturing costs largely reflected the impact of higher tariff costs.
Previous report
Resource Industries’ segment profit as a percent of total sales was 10.0 percent in the first quarter of 2026, compared with 17.0 percent in the first quarter of 2025.
Previous report
Supplemental Data for Results of Operations
Previous report
1 Elimination of Financial Products’ revenues earned from MP&E.
Previous report
3 Elimination of interest expense recorded between Financial Products and MP&E.
Previous report
4 Elimination of discount recorded by MP&E on receivables sold to Financial Products and of interest earned between MP&E and Financial Products as well as dividends paid by Financial Products to MP&E.
Previous report
5 Profit attributable to common shareholders.
Previous report
Supplemental Data for Results of Operations
Previous report
1 Elimination of Financial Products’ revenues earned from MP&E.
Previous report
3 Elimination of interest expense recorded between Financial Products and MP&E.
Previous report
4 Elimination of discount recorded by MP&E on receivables sold to Financial Products and of interest earned between MP&E and Financial Products as well as dividends paid by Financial Products to MP&E.
Previous report
5 Profit attributable to common shareholders.
Reworded paragraphs (68)
Previous wording
Highlights for the first quarter of 2026 include:
Current wording
Highlights for the second quarter of 2026 include:
Previous wording
•Total sales and revenues for the first quarter of 2026 were $17.415 billion, an increase of $3.166 billion, or 22 percent, compared with $14.249 billion in the first quarter of 2025. Sales were higher across the three primary segments.
Current wording
•Total sales and revenues for the second quarter of 2026 were $20.543 billion, an increase of $3.974 billion, or 24 percent, compared with $16.569 billion in the second quarter of 2025. Sales were higher across the three primary segments.
Previous wording
•Operating profit margin was 17.7 percent for the first quarter of 2026, compared with 18.1 percent for the first quarter of 2025. Adjusted operating profit margin was 18.0 percent for the first quarter of 2026, compared with 18.3 percent for the first quarter of 2025.
Current wording
•Operating profit margin was 20.9 percent for the second quarter of 2026, compared with 17.3 percent for the second quarter of 2025. Adjusted operating profit margin was 21.9 percent for the second quarter of 2026, compared with 17.6 percent for the second quarter of 2025.
Previous wording
•First-quarter 2026 profit per share was $5.47, and excluding the item in the table below, adjusted profit per share was $5.54. First-quarter 2025 profit per share was $4.20, and excluding the item in the table below, adjusted profit per share was $4.25.
Current wording
•Second-quarter 2026 profit per share was $7.77, and excluding the items in the table below, adjusted profit per share was $8.17. Second-quarter 2025 profit per share was $4.62, and excluding the item in the table below, adjusted profit per share was $4.72.
Previous wording
•Caterpillar ended the first quarter of 2026 with $4.1 billion of enterprise cash.
Current wording
•Caterpillar ended the second quarter of 2026 with $6.7 billion of enterprise cash.
Previous wording
A detailed reconciliation of GAAP to non-GAAP financial measures is included on pages 57-59.
Current wording
A detailed reconciliation of GAAP to non-GAAP financial measures is included on pages 71-73.
Previous wording
First-quarter 2026 profit per share was $5.47, compared with $4.20 profit per share in the first quarter of 2025. In the first quarter of 2026 and 2025, profit per share included restructuring costs. Profit for the first quarter of 2026 was $2.549 billion, an increase of $546 million, or 27 percent, compared with $2.003 billion for the first quarter of 2025. The increase was mainly due to the profit impact of higher sales volume and favorable price realization, partially offset by unfavorable manufacturing costs and higher selling, general and administrative (SG&A) and research and development (R&D) expenses. Unfavorable manufacturing costs largely reflected the impact of higher tariff costs. The increase in SG&A/R&D expenses was primarily driven by higher compensation expenses.
Current wording
Second-quarter 2026 profit per share was $7.77, compared with $4.62 profit per share in the second quarter of 2025. In the second quarter of 2026 and 2025, profit per share included restructuring costs. Profit for the second quarter of 2026 was $3.593 billion, an increase of $1.414 billion, or 65 percent, compared with $2.179 billion for the second quarter of 2025. The increase was mainly due to the profit impact of higher sales volume.
Previous wording
In Power & Energy, the 2026 outlook remains positive as robust backlog growth was driven by continued momentum in both Power Generation and Oil & Gas. We anticipate growth in Power Generation for both reciprocating engines and turbines and turbine-related services, driven by increasing energy demand to support data center build-out related to cloud computing and generative Artificial Intelligence (AI). We continue to see demand for prime power trend higher as data center customers look for alternative power solutions to keep pace with their growth. Oil & Gas is expected to see moderate growth in 2026 as compared to 2025. Reciprocating engine sales are expected to increase, driven by strong demand in gas compression applications. For turbines and turbine-related services used in Oil & Gas applications, we anticipate another year of strong sales in 2026 as backlog remains healthy, with continued solid order and inquiry activity. Services revenues in Oil & Gas applications are also expected to increase in 2026. Demand for products in Industrial applications is projected to grow modestly in 2026 as compared to 2025.
Current wording
In Power & Energy, our positive outlook for 2026 continues to reflect strong demand in both Power Generation and Oil & Gas. We continue to anticipate growth in Power Generation for both reciprocating engines and turbines and turbine-related services, driven by increasing energy demand to support data center build-out related to cloud computing and generative Artificial Intelligence (AI). Additionally, prime power demand continues to trend higher for turbines and turbine-related services and for reciprocating engine products and services to support their need for power solutions. Oil & Gas is expected to grow moderately in 2026 as compared to 2025. Reciprocating engine sales are anticipated to increase, driven by strong demand in gas compression applications. We expect continued momentum in demand for reciprocating engine aftermarket parts. For turbines and turbine-related services used in Oil & Gas applications, sales are expected to grow while the backlog remains healthy, with continued solid order and inquiry activity. Demand for products in Industrial applications is expected to grow moderately in 2026 as compared to 2025.
Previous wording
In Construction Industries, in 2026 as compared to 2025, we continue to expect growth in sales of equipment to end users supported by strong order rates. The outlook for North America remains positive, as sales of equipment to end users are anticipated to grow in 2026 as compared to 2025. Construction spending remains at healthy levels supported by the Infrastructure Investment and Jobs Act (IIJA), with the remaining funds to be spent over the next few years. Investment in critical infrastructure programs and data centers is contributing to overall construction spending levels. Dealer rental fleet loading and dealer’s rental revenue are both projected to increase in 2026 compared to 2025. In EAME, Europe is expected to remain stable supported by non-residential construction, and construction activity in Africa is projected to remain strong. While softening in the Middle East is anticipated, we expect the impact on sales of equipment to end users in EAME to be limited. In Asia Pacific, outside of China, softer economic conditions are expected in 2026. In China, we anticipate moderate conditions, with growth in the above 10-ton excavator industry in 2026, off of low levels of activity. Growth in Latin America is expected to continue.
Current wording
In Construction Industries, in 2026 as compared to 2025, we continue to expect growth in sales of equipment to end users supported by strong order rates. The outlook for North America remains positive, as sales of equipment to end users are anticipated to grow in 2026 as compared to 2025. Construction spending remains at healthy levels supported by the Infrastructure Investment and Jobs Act (IIJA), with the remaining funds to be spent over the next few years. Non-residential investment in critical infrastructure programs, heavy construction and data centers is contributing to overall construction spending levels. We expect dealer rental fleet loading will continue to grow in 2026 compared to 2025, including additional fleet loading for Major Projects in the third quarter of 2026. In EAME, Europe is expected to remain stable in 2026 as compared to 2025, supported by non-residential construction, and construction activity in Africa is projected to remain strong. While the Middle East continues to be challenged, we currently anticipate only a limited impact on sales of equipment to end users in EAME. In Asia Pacific, outside of China, softer economic conditions are expected in 2026. In China, we anticipate moderate conditions, with growth in the above 10-ton excavator industry in 2026, off of low levels of activity. Growth in Latin America is expected to continue.
Previous wording
In Resource Industries, we are seeing continued positive momentum with strong backlog growth. Sales of equipment to end users are expected to increase in 2026 as compared to 2025, primarily driven by rising demand for copper and gold, and positive dynamics in Heavy Construction and Quarry and Aggregates. In Mining, most key commodities remain above investment thresholds, customer product utilization is high, and the age of the fleet remains elevated. While some commodity prices have increased recently, customers remain focused on the long-term. We continue to expect rebuild activity in 2026 to increase slightly as compared to 2025. Rail services and locomotive deliveries are both anticipated to grow in 2026 as compared to 2025.
Current wording
In Resource Industries, we are seeing continued positive momentum with robust order rates and strong backlog growth. Sales of equipment to end users are expected to increase in 2026 as compared to 2025, primarily driven by rising demand for copper and gold, and positive dynamics in Heavy Construction and Quarry and Aggregates. In Mining, most key commodities remain above investment thresholds, customer product utilization is high, and the age of the fleet remains elevated. While some commodity prices have increased recently, customers remain focused on the long-term. We now expect rebuild activity in 2026 to increase moderately as compared to 2025. Rail services and locomotive deliveries are both anticipated to grow in 2026 as compared to 2025.
Previous wording
Second-Quarter 2026 Company Trends and Expectations
Current wording
Third-Quarter 2026 Company Trends and Expectations
Previous wording
In the second quarter of 2026 as compared to the second quarter of 2025, we anticipate strong sales and revenues growth, primarily driven by higher sales volume and favorable price realization in each of our three primary segments. We expect higher sales volume to be mainly driven by higher sales of equipment to end users, with a higher year-over year increase in sales of equipment to end users in the second quarter of 2026 as compared to the first quarter of 2026. We expect a minimal change in Construction Industries dealer inventory in the second quarter of 2026 as compared to the first quarter of 2026.
Current wording
In the third quarter of 2026 as compared to the third quarter of 2025, we anticipate strong sales and revenues growth, primarily driven by higher sales volume and favorable price realization in each of our three primary segments. We expect higher sales volume to be mainly driven by higher sales of equipment to end users across all three primary segments in the third quarter of 2026 as compared to the third quarter of 2025.
Previous wording
In the second quarter of 2026 as compared to the second quarter of 2025, we anticipate strong sales growth in Power & Energy mainly driven by continued strength in Power Generation and in Oil & Gas. We expect favorable price realization in Power & Energy. In Construction Industries, we expect strong sales growth primarily due to higher sales volume and favorable price realization. We expect higher sales volume to be driven by higher sales of equipment to end users. We anticipate a more typical sales increase in the second quarter of 2026 as compared to the first quarter of 2026, in contrast to the sizable sales increase in the second quarter of 2025 as compared to the first quarter of 2025. In Resource Industries, we expect strong sales growth primarily due to higher sales volume and favorable price realization. We expect higher sales volume to be driven by higher sales of equipment to end users. We expect price realization in Resource Industries to improve during 2026 as compared to 2025.
Current wording
In the third quarter of 2026 as compared to the third quarter of 2025, we anticipate strong sales growth in Power & Energy, driven by continued strength in Power Generation and in Oil & Gas, and modest growth in Industrial applications as it continues to recover. We expect favorable price realization in Power & Energy. In Construction Industries, we expect strong sales growth primarily due to higher sales volume and favorable price realization. We expect higher sales volume to be primarily driven by higher sales of equipment to end users, partially offset by the impact from changes indealer inventories. We expect a slight increase in dealer inventory in the third quarter of 2026, but modestly lower than the increase in the third quarter of 2025. In Resource Industries, we expect strong sales growth primarily due to higher sales volume. We expect higher sales volume to be mainly driven by higher sales of equipment to end users. We also expect services revenues growth in the third quarter of 2026 as compared to the third quarter of 2025. We anticipate favorable price realization in Resource Industries in the third quarter of 2026 as compared to the third quarter of 2025, but to a lesser extent than the second quarter of 2026 as compared to the second quarter of 2025.
Previous wording
We expect tariff costs to be around $700 million in the second quarter of 2026. We expect about 50 percent of the tariff costs to be incurred in Construction Industries, and about 25 percent of tariff costs to be incurred in both Power & Energy and Resource Industries.
Current wording
We anticipate tariff costs of around $600 million in the third quarter of 2026, which is similar to what was incurred in the third quarter of 2025. We expect about 50 percent of the tariff costs to be incurred in Construction Industries and 25 percent in both Power & Energy and Resource Industries.
Previous wording
In the second quarter of 2026 as compared to the second quarter of 2025, in Power & Energy, we anticipate the profit impact of higher sales volume and favorable price realization will be partially offset by higher manufacturing costs. In Construction Industries, we anticipate the profit impact of higher sales volume and favorable price realization to be partially offset by higher manufacturing costs and higher SG&A/R&D expenses. In Resource Industries, we anticipate higher manufacturing costs and higher SG&A/R&D expenses to be partially offset by favorable price realization and by the profit impact of higher sales volume.
Current wording
In the third quarter of 2026 as compared to the third quarter of 2025, in Power & Energy, we anticipate the profit impact of higher sales volume and favorable price realization to be partially offset by unfavorable manufacturing costs and higher SG&A/R&D expenses. In Construction Industries, we anticipate favorable price realization and the profit impact of higher sales volume to be partially offset by unfavorable manufacturing costs and higher SG&A/R&D expenses. In Resource Industries, we anticipate the profit impact of higher sales volume and favorable price realization will be partially offset by unfavorable manufacturing costs and higher SG&A/R&D expenses.
Previous wording
For the full-year 2026, we anticipate sales and revenues growth in the low double digits as compared to 2025. We expect strong sales growth across each of our three primary segments, mainly driven by higher sales volume and favorable price realization. Services revenues are expected to grow in 2026 as compared to 2025.
Current wording
We now anticipate sales and revenues growth in the mid-to-high teens for 2026 as compared to 2025. We expect strong sales growth across each of our primary segments, mainly driven by higher sales volume and favorable price realization. Services revenues are also expected to grow in 2026 as compared to 2025. We expect higher sales and revenues in the second half of 2026 as compared to the first half of 2025 following the typical seasonable trend. We expect a more typical decrease in Construction Industries’ dealer inventory of over $1.0 billion in the fourth quarter of 2026. We also expect Construction Industries’ dealer inventory will be higher at year-end 2026 as compared to year-end 2025. As a result, we expect an unfavorable impact from changes in dealer inventories for Construction Industries’ sales volume in the second half of 2026 as compared to the second half of 2025.
Previous wording
In 2026, we expect restructuring costs of approximately $300 to $350 million, and capital expenditures of around $3.5 billion. We anticipate our estimated annual effective tax rate to be 23.0 percent, excluding discrete items.
Current wording
In 2026, we continue to expect restructuring costs of approximately $300 to $350 million, and capital expenditures of approximately $3.5 billion. We anticipate our estimated annual effective tax rate to be 23.0 percent, excluding discrete items.
Previous wording
On February 20, 2026, the U.S. Supreme Court ruled that tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”) on goods imported into the United States were unauthorized. As of March 31, 2026, total IEEPA tariff costs were approximately $1.0 billion. The ruling did not address potential refunds, and therefore the ultimate availability, timing and amount of any potential refunds of these tariffs is highly uncertain. Based on the current facts and circumstances, we have determined that recovery of any funds is not probable. We will continue to monitor developments related to U.S. and foreign import and export policies that could impact our consolidated results of operations, financial position and cash flows.
Current wording
On February 20, 2026, the U.S. Supreme Court ruled that tariffs imposed under the IEEPA on goods imported into the United States were unauthorized. During 2025 and until CBP ceased collecting IEEPA tariffs in 2026, the company's total IEEPA tariff costs were approximately $1.0 billion.
Previous wording
•Glossary of terms is included on pages 51-53; first occurrence of terms shown in bold italics.
Current wording
•Glossary of terms is included on pages 65-67; first occurrence of terms shown in bold italics.
Previous wording
•Information on non-GAAP financial measures is included on pages 57-59.
Current wording
•Information on non-GAAP financial measures is included on pages 71-73.
Previous wording
The chart above graphically illustrates reasons for the change in consolidated sales and revenues between the first quarter of 2025 (at left) and the first quarter of 2026 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company’s board of directors and employees.
Current wording
The chart above graphically illustrates reasons for the change in consolidated sales and revenues between the second quarter of 2025 (at left) and the second quarter of 2026 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company’s board of directors and employees.
Previous wording
Total dealer inventory increased $2.0 billion during the first quarter of 2026, compared with an increase of $100 million during the first quarter of 2025. Construction Industries' dealer inventory increased by $1.5 billion during the first quarter of 2026, compared with a slight decrease during the first quarter of 2025. Dealers are independent, and the reasons for changes in their inventory levels vary, including their expectations of future demand and product delivery times. Dealers’ demand expectations take into account seasonal changes, macroeconomic conditions, machine rentals and other factors. Delivery times can vary based on availability of product from Caterpillar factories and product distribution centers.
Current wording
Total dealer inventory increased $600 million during the second quarter of 2026, compared with an increase of $100 million during the second quarter of 2025. Construction Industries' dealer inventory increased by $400 million during the second quarter of 2026, compared with a $300 million decrease during the second quarter of 2025. Dealers are independent, and the reasons for changes in their inventory levels vary, including their expectations of future demand and product delivery times. Dealers’ demand expectations take into account seasonal changes, macroeconomic conditions, machine rentals and other factors. Delivery times can vary based on availability of product from Caterpillar factories and product distribution centers.
Previous wording
1 Includes revenues from Machinery, Power & Energy of $183 million and $163 million in thefirst quarter of 2026 and 2025, respectively.
Current wording
1 Includes revenues from Machinery, Power & Energy of $210 million and $172 million in thesecond quarter of 2026 and 2025, respectively.
Previous wording
The chart above graphically illustrates reasons for the change in consolidated operating profit between the first quarter of 2025 (at left) and the first quarter of 2026 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company’s board of directors and employees. The bar titled Other includes consolidating adjustments and Machinery, Power & Energy's other operating (income) expenses.
Current wording
The chart above graphically illustrates reasons for the change in consolidated operating profit between the second quarter of 2025 (at left) and the second quarter of 2026 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company’s board of directors and employees. The bar titled Other includes consolidating adjustments and Machinery, Power & Energy's other operating (income) expenses.
Previous wording
•Interest expense excluding Financial Products in the first quarter of 2026 was $134 million, compared with $116 million in the first quarter of 2025. The increase was primarily due to higher average debt outstanding.
Current wording
•Interest expense excluding Financial Products in the second quarter of 2026 was $135 million, compared with $126 million in the second quarter of 2025. The increase was primarily due to higher average debt outstanding.
Previous wording
•Other income (expense) in the first quarter of 2026 was income of $260 million, compared with income of $107 million in the first quarter of 2025. The change was primarily driven by favorable impacts from foreign currency, total return swap contracts and commodity hedges.
Current wording
•Other income (expense) in the second quarter of 2026 was income of $398 million, compared with income of $84 million in the second quarter of 2025. The change was primarily driven by favorable impacts from foreign currency, total return swap contracts and investment and interest income.
Previous wording
•The effective tax rate for the first quarter of 2026 was 20.9 percent compared to 22.3 percent for the first quarter of 2025. Excluding the discrete items discussed below, the estimated annual effective tax rate was 23.0 percent for the first quarter of 2026 and 2025.
Current wording
•The effective tax rate for the second quarter of 2026 was 23.1 percent compared to 23.0 percent for the second quarter of 2025. Excluding the discrete items discussed below, the estimated annual effective tax rate was 23.0 percent for the second quarters of 2026 and 2025.
Previous wording
A discrete tax benefit of $68 million was recorded in the first quarter of 2026, compared with a $17 million benefit in the first quarter of 2025, for the settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S. GAAP compensation expense.
Current wording
A discrete tax benefit of $26 million was recorded in the second quarter of 2026, compared with a $1 million benefit in the second quarter of 2025, for the settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S. GAAP compensation expense.
Previous wording
Please see a reconciliation of GAAP to non-GAAP financial measures on pages 57-59.
Current wording
Please see a reconciliation of GAAP to non-GAAP financial measures on pages 71-73.
Previous wording
Power & Energy’s total sales were $7.031 billion in the first quarter of 2026, an increase of $1.248 billion, or 22 percent, compared with $5.783 billion in the first quarter of 2025. The increase was primarily due to higher sales volume of $840 million and higher inter-segment sales of $189 million.
Current wording
Power & Energy’s total sales were $8.238 billion in the second quarter of 2026, an increase of $1.201 billion, or 17 percent, compared with $7.037 billion in the second quarter of 2025. The increase was primarily due to higher sales volume of $736 million, favorable price realization of $212 million and higher inter-segment sales of $200 million.
Previous wording
•Power Generation – Sales increased in large reciprocating engines and in turbines and turbine-related services, primarily data center applications.
Current wording
•Power Generation – Sales increased in large reciprocating engines and in turbines and turbine-related services, primarily in data center applications.
Previous wording
•Industrial – Sales increased primarily in EAME and Asia/Pacific.
Current wording
•Industrial – Sales increased primarily in North America and EAME.
Previous wording
Power & Energy’s segment profit as a percent of total sales was 20.6 percent in the first quarter of 2026, compared with 22.3 percent in the first quarter of 2025.
Current wording
Power & Energy’s segment profit as a percent of total sales was 24.6 percent in the second quarter of 2026, compared with 22.1 percent in the second quarter of 2025.
Previous wording
•Sales increased in Latin America mainly due to higher sales volume and favorable currency impacts primarily related to the Brazilian real. Higher sales volume was mainly driven by the impact from changes in dealer inventories.
Current wording
•Sales increased in Latin America mainly due to higher sales volume and favorable currency impacts primarily related to the Brazilian real. Higher sales volume was mainly driven by higher sales of equipment to end users.
Previous wording
•Mining, Heavy Construction and Quarry & Aggregates – Sales increased primarily due to higher sales of equipment to end users in Mining.
Current wording
•Mining, Heavy Construction and Quarry & Aggregates – Sales increased primarily due to higher sales of equipment to end users.
Previous wording
•Rail – Sales increased in rail services.
Current wording
•Rail – Sales increased due to higher international locomotive deliveries. Sales also increased in rail services.
Previous wording
Financial Products’ segment revenues were $1.096 billion in the first quarter of 2026, an increase of $89 million, or 9 percent, compared with $1.007 billion in the first quarter of 2025. The increase was primarily due to a favorable impact from higher average earning assets across all regions.
Current wording
Financial Products’ segment revenues were $1.145 billion in the second quarter of 2026, an increase of $103 million, or 10 percent, compared with $1.042 billion in the second quarter of 2025. The increase was primarily due to a favorable impact from higher average earning assets across all regions.
Previous wording
At the end of the first quarter of 2026, past dues at Cat Financial were 1.39 percent, compared with 1.58 percent at the end of the first quarter of 2025. Write-offs, net of recoveries, were $29 million for the first quarter of 2026, compared with $20 million for the first quarter of 2025. As of March 31, 2026, Cat Financial's allowance for credit losses totaled $283 million, or 0.86 percent of finance receivables, compared with $284 million, or 0.86 percent of finance receivables at December 31, 2025.
Current wording
At the end of the second quarter of 2026, past dues at Cat Financial were 1.31 percent, compared with 1.62 percent at the end of the second quarter of 2025. Write-offs, net of recoveries, were $20 million for the second quarter of 2026 compared with $18 million for the second quarter of 2025. As of June 30, 2026, Cat Financial's allowance for credit losses totaled $294 million, or 0.84 percent of finance receivables, compared with $283 million, or 0.86 percent of finance receivables at March 31, 2026. The allowance for credit losses at year-end 2025 was $284 million, or 0.86 percent of finance receivables.
Previous wording
North America sales increased 34 percent primarily due to higher sales volume and favorable price realization. The increase in sales volume was mainly driven by higher sales of equipment to end users and the impact from changes in dealer inventories. Dealer inventory increased more during the first quarter of 2026 than during the first quarter of 2025.
Current wording
North America sales increased 37 percent primarily due to higher sales volume and favorable price realization. The increase in sales volume was mainly driven by higher sales of equipment to end users and the impact from changes in dealer inventories. Dealer inventory increased more during the six months ended June 30, 2026 than during the six months ended June 30, 2025.
Previous wording
Asia/Pacific sales increased 4 percent mainly due to favorable currency impacts primarily related to the Australian dollar.
Current wording
Sales increased 4 percent in Asia/Pacific mainly due favorable currency impacts primarily related to the Australian dollar.
Showing the first 40 of 68 pairs. Open the source sections for the rest.
Rearranged current paragraphs (19)
Current report — wording carried from elsewhere
In the third quarter of 2026 as compared to the third quarter of 2025, we expect the profit impact of higher sales volume and favorable price realization to be partially offset by unfavorable manufacturing costsand higher selling, general and administrative (SG&A) and research and development (R&D) expenses.
Current report — wording carried from elsewhere
In 2026 as compared to 2025, we expect the profit impact of higher sales volume and favorable price realization to be partially offset by unfavorable manufacturing costs and higher SG&A/R&D expenses.
Current report — wording carried from elsewhere
•In North America, sales increased primarily due to higher sales volume and favorable price realization. Higher sales volume was mainly driven by higher sales of equipment to end users and by the impact from changes in dealer inventories.
Current report — wording carried from elsewhere
•In EAME, sales increased primarily due to higher sales volume and favorable currency impacts mainly related to the euro. Higher sales volume was primarily driven by higher sales of equipment to end users.
Current report — wording carried from elsewhere
•Sales increased in Asia/Pacific mainly due to higher sales volume. Higher sales volume was primarily driven by higher sales of equipment to end users.
Current report — wording carried from elsewhere
Expense for corporate items and eliminations was $518 million in the second quarter of 2026, a decrease of $84 million from the second quarter of 2025. This decrease was due to timing differences, which included the majority of the expected IEEPA tariff recoveries recorded in the second quarter of 2026, and favorable impacts of segment reporting methodology differences. This was partially offset by higher corporate costs, higher restructuring costs and an unfavorable change in fair value adjustments related to deferred compensation plans.
Current report — wording carried from elsewhere
Sales were higher across the three primary segments.
Current report — wording carried from elsewhere
Dealer inventory increased $2.6 billion during the six months ended June 30, 2026, compared with an increase of $200 million during the six months ended June 30, 2025. Construction Industries' dealer inventory increased $1.9 billion during the six months ended June 30, 2026, compared with a decrease of $400 million during the six months ended June 30, 2025. Dealers are independent, and the reasons for changes in their inventory levels vary, including their expectations of future demand and product delivery times. Dealers’ demand expectations take into account seasonal changes, macroeconomic conditions, machine rentals and other factors. Delivery times can vary based on availability of product from Caterpillar factories and product distribution centers.
Current report — wording carried from elsewhere
Sales and Revenues by Geographic Region
Current report — wording carried from elsewhere
The chart above graphically illustrates reasons for the change in consolidated operating profit between the six months ended June 30, 2025 (at left) and the six months ended June 30, 2026 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company’s board of directors and employees. The bar titled Other includes consolidating adjustments and Machinery, Power & Energy’s other operating (income) expenses.
Current report — wording carried from elsewhere
Other Profit/Loss and Tax Items
Current report — wording carried from elsewhere
•The effective tax rate for the six months ended June 30, 2026 was 22.2 percent compared to 22.6 percent for the six months ended June 30, 2025. Excluding the discrete items discussed below, the estimated annual effective tax rate was 23.0 percent for the six months ended June 30, 2026 and June 30, 2025.
Current report — wording carried from elsewhere
Please see a reconciliation of GAAP to non-GAAP financial measures on pages 71-73.
Current report — wording carried from elsewhere
•Power Generation – Sales increased in large reciprocating engines and in turbines and turbine-related services, primarily in data center applications.
Current report — wording carried from elsewhere
•Industrial – Sales increased primarily in North America and EAME.
Current report — wording carried from elsewhere
•In North America, sales increased due to higher sales volume and favorable price realization. Higher sales volume was mainly driven by the impact from changes in dealer inventories and higher sales of equipment to end users.
Current report — wording carried from elsewhere
•Sales increased in Latin America mainly due to higher sales volume and favorable currency impacts primary related to the Brazilian real. Higher sales volume was mainly driven by higher sales of equipment to end users.
Current report — wording carried from elsewhere
•Mining, Heavy Construction and Quarry & Aggregates – Sales increased primarily due to higher sales of equipment to end users.
Current report — wording carried from elsewhere
Financial Products’ segment revenues were $2.241 billion for the six months ended June 30, 2026, an increase of $192 million, or 9 percent, compared with $2.049 billion for the six months ended June 30, 2025. The increase was primarily due to a favorable impact from higher average earning assets across all regions.
Rearranged previous paragraphs (7)
Previous report — wording carried elsewhere
In the second quarter of 2026 as compared to the second quarter of 2025, we expect favorable price realization and the profit impact of higher sales volume to be partially offset by higher manufacturing costs and higher SG&A/R&D expenses.
Previous report — wording carried elsewhere
In 2026 as compared to 2025, we expect favorable price realization and the profit impact of higher sales volume to be partially offset by higher manufacturing costs and higher SG&A/R&D expenses.
Previous report — wording carried elsewhere
•In North America, sales increased due to higher sales volume and favorable price realization. Higher sales volume was mainly driven by the impact from changes in dealer inventories.
Previous report — wording carried elsewhere
Reconciliations of MP&E free cash flow to the most directly comparable GAAP measure, net cash provided by operating activities are as follows:
Previous report — wording carried elsewhere
2 Elimination of net expenses recorded between MP&E and Financial Products.
Previous report — wording carried elsewhere
For the Three Months Ended March 31, 2026
Previous report — wording carried elsewhere
For the Three Months Ended March 31, 2025