Caterpillar earnings: guidance and what to watch
Caterpillar's next results are expected on October 29, 2026. Watch whether Caterpillar turns orders into profitable deliveries as dealers reduce inventory.
What has Caterpillar guided for 2026?
Second-quarter operating profit included $392 million of expected tariff recoveries. Management also said adjusted margin without expected recoveries would sit near the bottom of its target range, even though that range rises with sales. At $72 billion of annual sales, the stated range is 18–22%.
Caterpillar’s industrial business, which it calls Machinery, Power & Energy, or MP&E, is expected to generate $10,500–$15,000 million of free cash flow in 2026. Free cash flow is operating cash after capital spending, so the planned $3,500 million of capital expenditure is already deducted. The plan also includes $2,200 million of tariff costs and $300–$350 million of restructuring costs.
| The period guided | Low | High | The date it was given | |
|---|---|---|---|---|
| Sales & Revenues | Year to Dec 2026 | Sep 10, 2026 | ||
| Adjusted Operating Profit Margin | Year to Dec 2026 | Aug 4, 2026 | ||
| MP&E Free Cash Flow | Year to Dec 2026 | 10,500 | 15,000 | Aug 4, 2026 |
| Tariff Costs | Year to Dec 2026 | 2,200 | 2,200 | Aug 5, 2026 |
| Restructuring Costs | Year to Dec 2026 | 300 | 350 | Aug 5, 2026 |
| MP&E Capital Expenditures | Year to Dec 2026 | 3,500 | 3,500 | Aug 5, 2026 |
Has Caterpillar kept its past promises?
Services provide the other test. Caterpillar generated $24 billion of services revenue in 2025, below an earlier $28 billion aspiration. Its new target is $30 billion. Services include parts, repairs, maintenance, financing and digital support, turning the machines already operating in the field into continuing customer relationships. The global spare-parts market was estimated at $174.04 billion in 2025 and forecast at $264.12 billion in 2030; a major construction-equipment rival reported ¥145,226 million in parts and service revenue. The opportunity is large, but Caterpillar must show that added investment earns adequate returns.
What is Caterpillar's recent revenue and profit trend?
| Quarter to Jun 2026 | Quarter to Mar 2026 | Quarter to Dec 2025 | Quarter to Sep 2025 | Quarter to Jun 2025 | Quarter to Mar 2025 | Quarter to Dec 2024 | Quarter to Sep 2024 | |
|---|---|---|---|---|---|---|---|---|
| Revenue | 20,543 | 17,415 | 19,133 | 17,638 | 16,569 | 14,249 | 16,215 | 16,106 |
| Gross margin (calculated) | 37.8% | 35.1% | 30.5% | 33.8% | 34.8% | 37.1% | 36.3% | 37.5% |
| Operating income | 4,295 | 3,085 | 2,660 | 3,052 | 2,860 | 2,579 | 2,924 | 3,147 |
| Net income | 3,593 | 2,549 | 2,402 | 2,300 | 2,179 | 2,003 | 2,791 | 2,464 |
| EPS, diluted | 7.77 | 5.47 | 5.12 | 4.88 | 4.62 | 4.20 | 5.78 | 5.06 |
| Cash from operations | 5,709 | 1,302 | 4,533 | 3,883 | 2,936 | 926 | 3,711 | 3,153 |
What should Caterpillar watchers look for next?
The next tests are whether Caterpillar converts orders into profitable deliveries and temporary benefits into dependable cash. Third-quarter results are scheduled for October 29, 2026, and should test the expected $600 million of third-quarter tariff costs.
That report should also show whether customer demand remains healthy as dealers reduce inventory. Shipments may slow because dealers are working through machines already on their lots, or because contractors and other end users need fewer machines. Those causes have very different meanings for Caterpillar’s future.