Caterpillar Reported 10% Growth In Q3 Sales Amid Strong Demand

In the third quarter of 2025, Caterpillar reported sales of $17.6 billion, which is 10% higher than the $16.1 billion in the previous year.

The company is stating that the strong demand is the only factor that is driving this growth despite the tough overall market situation. The experts have marked the energy and transportation sector as the major segment that has seen a growing demand and sales. 

How does a tariff impact the profit margin?

Despite the remarkable increase in sales, Caterpillar’s operating profit fell 3% to roughly $3.05 billion from $3.15 billion in the previous year. The company cited ongoing pressure on Caterpillar construction equipment prices and increased manufacturing costs associated with recent U.S. tariffs. 

According to its earnings report, the primary causes of profit declines were unfavorable manufacturing costs, totaling $686 million, and a $191 million hit from lower price realization. While acknowledging the difficulties posed by tariffs, CFO Andrew Bonfield stressed that robust end-user demand is still driving positive overall performance.

How did the energy and transportation sector take over the construction?

Segment-wise, Caterpillar’s construction and energy-related businesses both experienced growth. Sales of the Construction Industries group, which includes loaders, bulldozers, and excavators, increased by 7% from the previous year to roughly $6.76 billion. 

North America continues to be its biggest market; approximately 57% of those construction revenues (roughly $3.9 billion in Q3) came from the United States and Canada, where sales were up 8% from the previous year. Construction machine prices continued to be under pressure despite the increase in sales, and segment profit declined: third-quarter construction operating profit dropped 7% to roughly $1.38 billion.

Even more robust growth was observed in the Energy & Transportation (E&T) segment. E&T’s sales increased 17% to about $8.4 billion, making it Caterpillar’s largest segment by revenue for the quarter. The growing demand for data center power and other energy projects benefited this industry, which includes engines, turbines, and power generators. 

Notably, E&T was the only segment with year-over-year profit growth (up 17% to $1.68 billion), reflecting the strong contribution of high-margin power products.

What are the goals of Caterpillar for upcoming year

As for the future, Caterpillar reports that at the end of Q3, its order backlog was at an all-time high of roughly $39.8 billion. Caterpillar’s competitive markets continue to be strong, as evidenced by the increasing backlog of customer orders. In their analysis of the findings, business executives pointed out that sustained investment in energy projects and robust infrastructure spending, particularly on cloud-data projects, are maintaining demand. In fact, analysts note that significant data-center power projects boosted order intake during the quarter.

Caterpillar’s forecast for full-year sales growth was slightly improved by these strong trends, but it still expects tariffs to be a major obstacle through the end of the year. Even though the remaining tariff impact is hurting profit, the company expects sales for this quarter to be higher than last year. Overall, it appears that Caterpillar is starting its last quarter of 2025 with significant momentum in its core markets based on the most recent results and the record backlog.

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