Heavy equipment manufacturer Caterpillar has increased its yearly revenue projections following a strong first quarter that surpassed profit expectations on April 30th. The company’s power equipment division saw substantial gains from the artificial intelligence infrastructure expansion, while construction equipment sales to dealers also showed impressive growth.
Widely regarded as an indicator of global industrial health, Caterpillar also reduced its estimated tariff impact to between $2.2 billion and $2.4 billion for the year, down from the previous $2.6 billion projection.
The company’s stock price climbed 5.3% during pre-market trading following the announcement.
Throughout the past year, Caterpillar’s power and energy division has experienced robust sales as data centers with high electricity demands invest significantly in power generation and backup systems to support artificial intelligence expansion.
Financial analysts had previously noted that the company’s earnings would likely benefit from dealers restocking construction equipment inventory and successful completion of outstanding AI-related orders.
Caterpillar now expects full-year revenue growth in the low double-digit percentage range, a significant increase from its earlier projection of approximately 7% compound annual revenue growth.
The company reported first-quarter adjusted earnings per share of $5.54 for the January through March period, up from $4.25 during the same period last year. This figure exceeded analyst predictions of $4.62 per share based on LSEG data.
Total revenue increased 22% to $17.42 billion, surpassing expectations of $16.61 billion.
The construction segment saw revenue jump 38%, while the power and energy division posted 22% growth. Both areas benefited from robust customer demand in North America, which represents Caterpillar’s largest market.
The company noted that gains from increased sales volume and improved pricing were partially reduced by unfavorable manufacturing costs totaling $710 million, primarily related to higher tariff expenses.
American industrial companies were significantly impacted by previous U.S. tariffs, which increased costs for imported raw materials and production equipment, while the broader economy experienced effects from delayed business activity and reduced corporate investment.
