Caterpillar Inc. (NYSE:CAT) reported Thursday first-quarter 2026 results, with sales rising 22% year over year to $17.4 billion.



Adjusted profit per share of $5.54 beat the $4.62 estimate, while GAAP profit per share was $5.47.



Shares were trading higher following the earnings release, compared with the prior-year GAAP profit per share of $4.20.



<h2>Margins Impacted By Costs, Tariffs</h2>



Operating profit rose 20% to $3.09 billion, though margins edged lower year over year.



The operating profit margin came in at 17.7% for the first quarter of 2026, down from 18.1% a year earlier. Adjusted operating margin slipped to 18.0% from 18.3% in the prior-year period.



Higher sales volume contributed $2.3 billion, and favorable price realization added $426 million, offset by higher manufacturing and operating costs.



Unfavorable manufacturing costs “largely reflected the impact of higher tariff costs,” along with increased SG&amp;A and R&amp;D expenses of $225 million.



<h2>Cash Deployment, Balance Sheet</h2>



Enterprise operating cash flow was $1.9 billion, and the company ended the quarter with $4.1 billion in enterprise cash. Caterpillar deployed $5.7 billion for share repurchases and dividends.



Total debt included $7.7 billion due within 1 year and $30.6 billion in long-term debt.



<h2>Caterpillar Segment Performance Mixed</h2>



Power &amp; Energy sales rose 22% to $7.03 billion, with profit up 13% to $1.45 billion, while margin declined to 20.6%, driven by higher volume and demand across end markets.



Construction Industries revenue climbed 38% to $7.16 billion, with profit up 50% to $1.54 billion and margin improving to 21.4%, driven by higher sales volume and dealer inventory increases.



Resource Industries’ sales rose 4% to $3.80 billion, but profit fell 39% to $378 million, with margin declining to 10.0% due to higher manufacturing costs tied to tariffs.



Financial Products revenue increased 9% to $1.10 billion, with profit up 14% to $245 million. Past dues improved to 1.39% from 1.58%, while write-offs rose to $29 million.



<h2>Outlook Supported By Backlog</h2>



“Our team delivered a strong start to the year, driven by resilient end markets and disciplined execution in a dynamic operating environment,” said Caterpillar Chairman and CEO Joe Creed.



“Solid sales and revenues growth, combined with robust order activity, demonstrate the strength of our business and our focus on solving our customers’ toughest challenges. A record backlog provides a strong foundation for continued positive momentum.”



Caterpillar expects second-quarter 2026 sales and revenues to be higher year over year, with tariff costs of about $700 million.



Including tariffs, the adjusted operating profit margin is expected to increase from the prior-year period.



For full-year 2026, the company expects low-double-digit sales and revenue growth, and tariff costs of $2.2 billion to $2.4 billion, with an adjusted operating margin higher than prior expectations.



Including tariffs, margins are expected near the bottom of the target range, while excluding tariffs, in the top half. MP&amp;E free cash flow is expected to be higher than in 2025.



<h2>Caterpillar Price Action</h2>



CAT Price Action: Caterpillar shares were up 5.49% at $853.22 at the time of publication on Thursday. The stock is trading at a new 52-week high, according to Benzinga Pro data.



Image by astudio via Shutterstock

Caterpillar (CAT) reported Q1 2026 results with $17.4B in sales and $5.54 EPS, exceeding estimates. Despite a 22% sales increase, margins were impacted by higher tariff costs, leading to a slight decline in operating profit margin to 17.7%. The company expects continued growth in Q2 and full-year 2026, with anticipated tariff costs of $2.2B to $2.4B. Shares rose 5.49% to $853.22, reaching a 52-week high.

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