Oct 29, 2026 earnings call — Record backlog and strong sales growth
Sales and revenues $20.7 billion; backlog a record $78 billion; adjusted profit per share $7.20.
Revenue $20.7B (est $20.8B) · EPS $7.20 (est $7.06)
Key quotes
"Strong order rates across all 3 of our primary segments drove backlog to a record $78 billion."
"Specifically, our Power and Energy team continued to increase production of large reciprocating engines and turbines while simultaneously expanding capacity to meet demand."
"We anticipate the typical seasonal dealer inventory reduction to be roughly $1.6 billion, which compares to a decline of $600 million in the fourth quarter of 2025."
Analyst Q&A 11
Prime Power orders and backlog
Q (Robert Wertheimer · Melius): Analyst asked for updates on Prime Power gigawatts, whether Prime Power is still expanding, and how orders into 2029 imply about 2028 capacity and backlog management.
A: Management said Prime Power demand is trending higher with ongoing quoting activity. They have extended backlog and are taking some gas Prime Power orders into 2029 while still able to roll some diesel backup orders into 2028. They have frame agreements converting to orders and are ramping capacity to meet customer demand.
"Rob, we still continue to see trending higher Prime Power, both turbines and reciprocating gen sets." — Joseph Creed (CEO·CHAIR)
Backlog timing and next-12-month orders
Q (Tami Zakaria · JPMorgan): Analyst asked whether recent orders are mainly for later years ('29, '30) or for the next 12 months, and when record backlog might start to step down with new capacity.
A: Management said they are taking orders into '29 and have some in 2030, but timing depends on product size. Large engines and turbines are extended into late '28 and '29, while smaller gensets have shorter lead times. They expect some continued backlog growth but want production to catch up, and noted 58% of backlog is expected to sell within the next 12 months.
"So I want to be clear, I mean, we're taking our orders into '29." — Joseph Creed (CEO·CHAIR)
Margin recovery timing
Q (Jamie Cook · Truist): Analyst asked when margins can move back to the mid-to-high end of the long-term target and what will drive that, plus how much incremental capacity comes online in 2027.
A: Management said they aim to operate toward the middle of their margin target and that as sales grow they expect margins to improve. They said they expect to start clawing away from the bottom of the margin range in 2027 and will provide more detail next quarter. They are balancing tariff headwinds while keeping investments to support growth.
"I would expect and we'll talk to you a lot more about 2027 in the next quarter that we start to claw our way off the bottom of that margin target range as we go forward," — Joseph Creed (CEO·CHAIR)
Q4 revenue growth and capacity limits
Q (David Raso · Evercore): Analyst asked why sequential revenue appears modest into Q4 given capacity adds and demand, and what that implies for 2027 revenue.
A: Management said Power and Energy revenue is paced by capacity and customer delivery timing, with no slack in the system and some operational issues like a test cell outage. They noted a planned CI dealer inventory drawdown and ongoing RI ramping challenges, but said results are in line with expectations and they feel good about the position heading into 2027.
"As we said in the prepared remarks, I mean, on Power and Energy, it's really paced by capacity and timing of customer deliveries." — Joseph Creed (CEO·CHAIR)
2027 growth outlook versus target CAGR
Q (Michael Feniger · BofA): Analyst asked whether 2027 could exceed the 6%–9% target CAGR given backlog and frame agreements, and what could hold growth back.
A: Management said 2027 guidance is influenced by difficult year-over-year comps and capacity constraints in Power and Energy, not a single cliff event. They expect to keep increasing capacity each quarter and work through dealer inventory dynamics, and said they are confident heading into 2027 while noting operational ramp challenges that they are addressing.
"It's not a cliff event as we've said, so every quarter we try to get more and more product out." — Joseph Creed (CEO·CHAIR)
Mining orders and ramp issues
Q (Charles Albert Dillard · Bernstein): Analyst asked for an update on mining order trends, whether demand is refurbishment or replacement, and details on ramping challenges and timing to resolve them.
A: Management said they had three strong quarters of RI orders, driven by mining (copper and gold) and heavy construction, with growth in services and aftermarket rebuilds. They are increasing factory capacity for large mining trucks and working with suppliers; the ramp issues are normal growing pains and they expect to resolve them over time.
"Yes, we've had 3 really good order quarters in a row for RI, which we're really happy about." — Joseph Creed (CEO·CHAIR)
Permit risks and who backs long lead slots
Q (Jerry Revich · Wells Fargo): Analyst asked if permitting or credit concerns have changed timing in the backlog and what share of long lead production slots are backed by hyperscalers.
A: Management said they will not quantify hyperscaler versus colo or IPP proportions but that they work with all customer types and generally have line of sight to projects. They said they have been flexible moving slots to meet customer timelines and have not seen significant changes in how they work with customers, though backlog will be lumpy and extended compared to historical norms.
"I mean I don't think we would quantify hyperscalers versus colos versus others or IPPs, but we work with all of them." — Joseph Creed (CEO·CHAIR)
Book-to-bill and booking slippage
Q (Mircea Dobre · Baird): Analyst asked how to think about book-to-bill heading into Q4 and whether taking orders into '29–'30 means booking slippage due to capacity constraints.
A: Management said production is increasing so sales are rising and that backlog growth varies by product and segment; some large RI and Prime Power projects will be lumpy. They warned against relying on a single metric like backlog or book-to-bill and said they consider sales to users, order rates, and production together when assessing health of the business.
"As I mentioned, for certain products, when you look at our backlog, all 3 segments are in there and all 3 have been growing." — Joseph Creed (CEO·CHAIR)
Data center demand mix (turbines vs diesel)
Q (Kyle Menges · Citi): Analyst asked how data center demand is evolving for turbines, natural gas, and diesel backup, and how the mix might shift toward 2030.
A: Management said discussions with customers are unchanged since last quarter and standby diesel backup demand continues to show strong momentum, which predated AI. They said capacity is relatively fungible across applications, they expect to move significant natural gas and gas compression product, and capacity plans are aligned to their 2030 goals while supporting aftermarket and services growth.
"We continue to see momentum in standby diesel backup, which has been the growing base of our business for quite a while before even really AI started to accelerate the growth even more" — Joseph Creed (CEO·CHAIR)
Construction demand and rental mix
Q (Kristen Owen · Oppenheimer): Analyst asked for more color on construction backlog growth: how much demand is for company rental fleet versus third parties and other sources beyond mega projects.
A: Management said construction order rates and STUs are strong and that their strategy is to get customers using Cat machines whether by rent, lease, or buy. They said the major projects fleet supplements local dealers, enabling dealers to participate in more rental deals, and they see continued strength in compact equipment and infrastructure spending.
"Our goal and our strategy really is to get customers in the cabs of Cat machines, whether they want to rent or lease or buy, and we're seeing customers do all 3." — Joseph Creed (CEO·CHAIR)
10-megawatt MaK engine restart
Q (Stephen Volkmann · Jefferies): Analyst asked for an update on the MaK 10-megawatt engine restart and how the ramp should be thought about.
A: Management said they plan to ship the first MaK 10-megawatt units in the fourth quarter and will continue ramping through next year as they restart the product for power generation. They said the program is on track and ramping will proceed into 2027.
"Yes, we plan to ship our first units here in the fourth quarter, and we'll continue to ramp as we go through next year on restarting the 10-megawatt MaK engine" — Joseph Creed (CEO·CHAIR)