More earnings analysis: https://betafinch.com Groups: INDUSTRIALS (https://betafinch.com/groups/INDUSTRIALS) ────────── Welcome to Beta Finch, your AI-powered earnings breakdown of the companies moving the markets. Let's get into Caterpillar's second quarter. ALEX: Hey everyone, welcome back to Beta Finch! I'm Alex, joined as always by Jordan, and today we're digging into Caterpillar's Q2 2026 results — and folks, this is a big one. But before we dive in, quick reminder: this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions. JORDAN: And it's a good quarter to have that disclaimer front and center, Alex, because the numbers here are eye-popping. Caterpillar just posted $20.5 billion in sales and revenues — up 24% year-over-year. That's the first time in company history they've cracked $20 billion in a single quarter. ALEX: A genuine milestone. And it wasn't just the top line — adjusted profit per share came in at $8.17, up 73% from last year. CEO Joe Creed called it out as a record, and honestly, the whole print beat expectations across the board. JORDAN: What really stands out to me is the backlog. It grew sequentially by $9 billion to $72 billion total — that's up 92% versus a year ago. And all three primary segments — Construction Industries, Resource Industries, and Power & Energy — contributed to that growth. This isn't a one-segment story. ALEX: Right, and that Power & Energy segment is the one everyone's buzzing about because of the AI and data center angle. Sales to users in power generation grew 72% — driven by demand for large gen sets and turbines going into data centers. JORDAN: It's wild — they're literally restarting a discontinued product line for this. They stopped making their 10-megawatt medium-speed gas reciprocating engine back in 2022, and now they're bringing back about 1.5 gigawatts of capacity because customers are asking for more units. Shipments start in Q4. ALEX: And on the call, an analyst pushed Creed on whether that demand has real staying power out to 2028, 2029, 2030 — given how much AI capex speculation is out there. Creed's answer was pretty direct: "No one is slowing down at the moment. In fact, if we can get more units out, they're asking us to give them more units." They're already taking orders into 2029 and 2030. JORDAN: And it's not just data centers propping this up — that's the part I found reassuring. Oil and gas backlog is nearly double what it was a year ago, mostly gas compression demand. So even if the AI narrative cools at some point, there's a broader base under this Power & Energy growth story. ALEX: Let's talk Construction Industries too, because that segment had its own headline moment — sales up 35% to $8.3 billion, sixth straight quarter of sales-to-users growth. A lot of that was rental fleet loading, including this new "Major Projects" joint venture with dealers — basically a national rental fleet aimed at massive infrastructure and data center builds. JORDAN: Margins there were strong too — 23.3%, up 320 basis points. Resource Industries also chipped in with 20% sales growth, helped by mining demand for copper and gold, plus they closed the Skycatch acquisition in July — that's AI-powered spatial data tech for mining operations. ALEX: Now, we can't ignore tariffs — they came up a lot on this call. CFO Kyle Epley said the company got a $392 million benefit from IEEPA tariff recoveries this quarter, and actual tariff costs came in lower than expected, around $400 million versus the $700 million they'd guided to in April. For the full year, they now expect about $2.2 billion in tariff costs, the low end of their prior range. JORDAN: That's a meaningful swing, and it's part of why margins beat — adjusted operating profit margin hit 21.9%, up 430 basis points year-over This episode includes AI-generated content.
