CAT · Caterpillar Inc.

Caterpillar delivered a strong first quarter in 2026, with sales and revenues rising 22% to $17.4 billion from $14.2 billion in the prior year. The increase was driven by higher sales volume of $2.3 billion and favorable price realization of $426 million. Operating profit grew 20% to $3.085 billion, though operating profit margin contracted slightly to 17.7% from 18.1% due to unfavorable manufacturing costs, largely from higher tariffs, and increased SG&A/R&D expenses. Adjusted operating profit margin was 18.0%, down from 18.3%. GAAP EPS of $5.47 and adjusted EPS of $5.54 both exceeded the prior year's $4.20 and $4.25, respectively. Segment performance was mixed: Construction Industries led with a 38% sales increase to $7.2 billion and a 50% profit jump to $1.5 billion, benefiting from dealer inventory builds and price realization. Power & Energy sales rose 22% to $7.0 billion, with power generation up 41% on data center demand, while profit increased 13% to $1.45 billion. Resource Industries saw only 4% sales growth to $3.8 billion, and profit plunged 39% to $378 million due to tariff-related manufacturing cost headwinds. Management highlighted resilient end markets and a record backlog. The company deployed $5.7 billion in cash for share repurchases ($5.0B) and dividends ($0.7B). Enterprise cash stood at $4.1 billion, with operating cash flow of $1.9 billion. The supplemental retail sales data (Exhibit 99.2) showed total retail sales up 14% year-over-year in Q1 2026, with Power & Energy retail up 32% and Construction Industries up 7%.