Caterpillar raises revenue outlook as data centre demand accelerates
Caterpillar Inc. raised its annual and long-term revenue forecasts after reporting stronger-than-expected quarterly results, driven by demand for power generation equipment tied to artificial intelligence data centre expansion and construction activity.
The company posted earnings of $5.54 per share in the January-March quarter, beating analyst estimates of $4.62. Revenue climbed 22% to $17.42 billion, exceeding forecasts of $16.61 billion and marking the strongest growth in over four years.
Order backlog reached a record $62.7 billion by the end of March. The company now expects full-year revenue growth in the low double-digit range, up from its prior projection of around 7%.
Power generation and construction lead growth
Caterpillar's construction segment reported revenue of $7.16 billion, up 38%, driven largely by higher dealer sales in North America. The power and energy division grew 22% to $7.03 billion.
Technology companies investing in data centre infrastructure and related facilities have substantially increased equipment demand. CEO Joe Creed said critical infrastructure programmes and data centre investments are contributing to overall construction spending.
The company revised its forecast for power generation equipment sales upward. It now expects these sales to triple by 2030 compared to 2024 levels, compared to its earlier projection of doubling over the same period.
Long-term outlook shifts higher
Caterpillar raised its long-term annual revenue growth outlook for 2024-2030 to 6-9%, from the previous 5-7% range.
Higher sales volumes and improved pricing supported quarterly performance, though manufacturing costs of around $710 million-largely from tariffs-offset some gains.
Tariff impact reduced
The company lowered its expected tariff impact for the full year to between $2.2 billion and $2.4 billion, down from an earlier estimate of $2.6 billion. It expects tariff-related costs of about $700 million in the second quarter.
CFO Kyle Epley said the reduction followed a U.S. Supreme Court ruling that struck down tariffs imposed under the International Emergency Economic Powers Act. The decision shifted certain levies to Section 232 tariffs.
Caterpillar's stock rose nearly 9.7% during the past week, touching a record high. Investors view the company's performance as a barometer of global industrial activity.
For construction and real estate professionals, Caterpillar's raised forecasts signal sustained demand for equipment and infrastructure development. Learn more about AI for Real Estate & Construction and how technology is reshaping the sector.
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