Aug 4 (Reuters) – Caterpillar raised its revenue growth forecast after beating second-quarter profit estimates on Tuesday, benefiting from a buildout of AI data centers that has spurred demand for its power-generation and construction equipment.
Shares of the company rose 9% in premarket trading as it also cut its tariff costs forecast for the full year to around $2.2 billion from an earlier forecast of $2.2 billion to $2.6 billion.
Over the last few quarters, the equipment giant has seen a surge in orders for construction equipment amid a nationwide buildout of data centers as well as the backup power equipment needed for such buildings.
Lowered tariffs in the U.S. and a flood of orders have overhauled the fortunes of equipment manufacturers such as Caterpillar, whose profits were upended at this time last year by Washington’s move to curb imports by raising levies.
Increased spending on infrastructure and energy projects by U.S. President Donald Trump’s administration as well as a boost in the construction of commercial buildings such as data centers are key reasons for Caterpillar’s swelling order books.
In the April to June quarter, Caterpillar said it booked orders worth $9.4 billion, taking its order backlog to a record $72.1 billion.
Its overall revenue grew 24% to $20.54 billion in the quarter ending June 30. Its core construction segment revenue grew 35% in that period, led by a 50% jump in the North America market.
The power and energy arm, meanwhile, posted 17% growth in revenue. The two segments accounted for a combined 81% of Caterpillar’s total revenue.
It reported adjusted per-share profit of $8.17, compared with $4.72 per share a year earlier, well above analysts’ expectation of $6.20 per share, according to data compiled by LSEG.
Caterpillar expects its full-year revenue to grow in the mid-to-high-teens percentage range, compared to an earlier projection of low-double-digit growth.
(Reporting by Nandan Mandayam in Bengaluru; Editing by Pooja Desai)
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