A boring digger company is one of the best-performing index stocks this year
Revenue surpassed 20 billion in a quarter for the first time in the company's history, adjusted earnings per share up 73%, order book swelled by 92%. Yet less than a week before, the stock lost up to eight percent due to a single signed executive order. The answer to who is right lies not in the results, but in how much of that 72 billion is to be delivered after 2027.
Key points
Quarterly revenue topped $20 billion for the first time, and adjusted earnings per share jumped 73%.
However, $392 million in tariff refunds was included in operating profit, which the company does not expect in the second half.
The order book grew to $72 billion, but only 52% of it is scheduled for delivery within the next twelve months.
Six days before the results, a single downgrade sent the stock down as much as eight percent over a moratorium on data centers in New York State.
The company's last major cycle ended with a 42% revenue drop over four years.
On Tuesday morning, Caterpillar $CAT reported numbers that appear in industrial-company textbooks once a decade. Revenue and sales of $20.543 billion, up 24% year-over-year. Adjusted earnings per share of $8.17 compared to consensus estimates, which ranged from $5.70 to $6.20 depending on the source. Operating profit up by half to $4.295 billion. Order book at a record $72 billion, 92% above the prior year. All three major segments grew, and grew by double digits.
The stock reacted with a jump that exceeded ten percent during the morning. Because the Dow Jones is price-weighted and Caterpillar is one of its highest-priced components, the move added over 450 points to the index according to TipRanks calculations.
And yet even after that jump, it traded roughly eighteen percent below its late-June high. Less than a week before the results, a single downgrade pulled it down, and its substance had nothing to do with demand, margins, or tariffs. It was about permitting.
This is a company that has not traded on how many diggers it sells for a year. It trades on how many megawatts it can build for data centers, and above all on how long the market thinks that construction will take. So the last quarter is almost irrelevant. What is being decided is the year 2028.
When will this cycle run its course, and how much of it is already priced in?