Caterpillar Misses Third-Quarter Revenue Views; Shares Tumble

01:04 PM EDT, 10/29/2026 (MT Newswires) -- Caterpillar's (CAT) third-quarter revenue fell short of Wall Street's estimates, while the company said it expects "moderate" sales growth in the ongoing quarter, sending its shares tumbling Thursday. The heavy equipment manufacturer reported a 17% year-over-year increase in sales and revenue to $20.68 billion for the September quarter. Analysts in a FactSet survey expected $20.76 billion. Adjusted profit jumped to $7.20 a share from $4.95 a year earlier, ahead of the consensus of $7.06. "Dealer inventory increased by $300 million in construction industries, compared to an increase of $600 million in the third quarter of 2025," Chief Financial Officer Kyle Epley said on an earnings conference call, according to a FactSet transcript. "This created a modest headwind to sales volume in the quarter and was in line with our expectations." For the fourth quarter, Caterpillar expects "moderate" year-over-year growth in sales, it said in an earnings presentation. "We are lapping a strong quarter last year, which creates a tougher comparison this year," Epley said on the call. The company's shares were down 7.7% in afternoon trade. The stock has risen nearly 15% so far this year. Sales in the construction industries business increased 18% to $7.98 billion in the third quarter, while the Street expected $8.12 billion. The power and energy segment delivered an 18% sales growth to $8.78 billion, topping the consensus of $8.22 billion. "Backlog continues to grow due to strong order rates, and we're now taking some large reciprocating orders as far out as 2029 and turbine orders into 2030," Chief Executive Joe Creed said on the call. "We continue to anticipate full-year growth in power generation for both Cat reciprocating engines and Solar Turbines, driven by increasing energy demand to support the data center buildout related to cloud computing and generative (artificial intelligence)." Third-quarter operating profit surged 38% to $4.21 billion, which included $128 million of International Emergency Economic Power Act tariff recoveries. Excluding the favorable impact from tariff recoveries, the company continues to anticipate full-year adjusted operating profit margin to be near the bottom of its target range. "Our full-year margin expectation reflects the strategic investments we are making to execute our growth strategy, as well as the ongoing impact of tariffs and higher freight costs due to elevated energy prices," Creed told analysts. For the full year, Caterpillar continues expect sales and revenue to rise by mid-to-high teens, according to the presentation. Analysts are looking for an 18% annual jump in sales. In a recent note, Truist Securities said it viewed the company as still "one of the most debated names" in terms of the pace and size of earnings and backlog growth. Agricultural equipment manufacturer Deere (DE) is scheduled to release its fiscal fourth-quarter results Nov. 25. In August, the company raised the lower ends of its net income and cash flow guidance ranges, citing a strong fourth-quarter order book. Last week, irrigation and infrastructure equipment manufacturer Lindsay (LNN) reported higher-than-expected fiscal fourth-quarter results. Price: 657.43, Change: -55.95, Percent Change: -7.84