Caterpillar (CAT.US) Q3 results beat expectations, yet shares plunge nearly 10% in premarket trading.

Caterpillar (CAT.US) reported third-quarter 2026 results before the U.S. market opened on October 29, showing sales and revenue of $20.68 billion for the quarter, up 17% year over year, driven by higher sales volume and price realization; adjusted earnings per share of $7.20, above the market expectation of about $7.03 and compared with $4.95 a year earlier; GAAP earnings per share of $7.13. Operating profit was $4.21 billion, up 38% year over year, with an operating margin of 20.4%; adjusted operating margin was 20.6%, up 3.1 percentage points from a year earlier. Operating profit for the quarter included $128 million in tariff refunds. Chairman and Chief Executive Officer Joe Creed said: "Third-quarter results reflect the resilience of end markets, with strong orders and a record backlog. The team continues to execute our strategic priorities in a dynamic environment, laying the foundation for a strong full-year performance and creating long-term value for customers and shareholders." All three segments grew. The Power & Energy segment posted sales of $8.78 billion, up 18%, including a 30% increase in power generation applications, with segment profit of $2.14 billion, up 31%, and a margin of 24.4%; Construction Industries sales were $7.98 billion, up 18%, with profit up 33% to $1.83 billion; Resource Industries sales were $4.62 billion, up 15%, with margin edging down 0.1 percentage point to 13.5%. In terms of retail sales, global machine retail sales rose 22% year over year in the third quarter, including a 75% increase in power generation retail sales, while growth in mining, heavy construction and quarry and aggregates retail sales slowed to 8% from 15% in the second quarter, and rail retail sales fell 70%. On cash flow, operating cash flow from business was $4.4 billion for the quarter, and corporate cash at quarter-end was $7.9 billion; operating cash flow for the first three quarters was $10.59 billion, up 30% year over year, while share repurchases over the same period were $7.75 billion, up 60% year over year. In the quarter, the company used $1.2 billion to repurchase Caterpillar common stock and paid $700 million in dividends. The company said its backlog reached a record high again but did not disclose the specific amount, nor did it provide quantitative full-year guidance in the press release. It is worth noting that despite core results beating expectations, the company's shares came under heavy pressure in premarket trading, plunging 9.45% as of press time.