Construction equipment company Caterpillar (NYSE: CAT) reported Q3 2026 results beating Wall Street’s revenue expectations, with revenue up 17.3% year on year to $20.68 billion. Its non-GAAP profit of $7.20 per share was 2.4% above analysts’ consensus estimates.
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Caterpillar (CAT) Q3 2026 highlights:
- Revenue $20.68 billion vs S&P analysts’ consensus estimates of $20.37 billion (17.3% year-on-year growth, 1.5% beat)
- Adjusted EPS $7.20 vs S&P analysts’ consensus estimates of $7.03 (2.4% beat)
- Operating margin 20.4%, up from 17.3% in the same quarter last year
- Free cash flow margin 0%, down from 17.5% in the same quarter last year
- Market capitalization $327.9 billion
"Our third-quarter results reflect the durability of our end markets, with strong order rates and a record backlog," said Caterpillar Chairman and CEO Joe Creed. "Our team continues to execute our strategic priorities in a dynamic environment, positioning us for a strong year while delivering long-term value for our customers and shareholders."
Revenue growth
Examining a company’s long-term performance can provide clues about its quality. Even a weak business can perform well for one or two quarters, but a high-quality one grows for years. Over the last five years, Caterpillar grew its revenue at a solid 9.9% compounded annual growth rate. Its growth beat the average industrials company and shows its offerings resonate with customers.
Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Caterpillar’s annualized revenue growth of 8.8% over the last two years is below its five-year trend, but the results were still respectable. 
This quarter, Caterpillar reported year-on-year revenue growth of 17.3%, and its $20.68 billion of revenue exceeded Wall Street’s consensus estimates by 1.5%.
Looking ahead, sell-side analysts expect revenue to grow 9.8% over the next 12 months, according to S&P, similar to its two-year rate. This projection is particularly healthy for a company of its scale and suggests the market sees success for its products and services.
Operating margin
Caterpillar has performed well over the last five years. It demonstrated strong profitability for an industrials business, with an average operating margin of 17.6%.
Looking at the trend in its profitability, Caterpillar’s operating margin rose by 4.5 percentage points over the last five years, as its revenue growth gave it operating leverage.
This quarter, Caterpillar reported an operating margin of 20.4%, up 3.1 percentage points year on year. Its gross margin expanded more than its operating margin, suggesting that leverage on its cost of sales was the primary driver of the recent efficiency gains.
Earnings per share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Caterpillar’s EPS grew at a 20.5% compounded annual growth rate over the last five years, higher than its 9.9% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
A closer look at Caterpillar’s earnings helps explain its performance. As mentioned earlier, Caterpillar’s operating margin expanded by 4.5 percentage points over the last five years. On top of that, its share count shrank by 15.8%. These are positive signs for shareholders because improving profitability and share buybacks boost EPS growth relative to revenue growth. 
As with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.
For Caterpillar, its two-year annual EPS growth of 8.9% was lower than its five-year trend. This was underwhelming, but the company performed well on other measures of financial health.
In Q3, Caterpillar reported adjusted EPS of $7.20, up from $4.95 in the same quarter last year. This result beat analysts’ consensus estimates by 2.4%. Over the next 12 months, Wall Street expects Caterpillar’s full-year EPS to grow 17.2% from $26.07 to $30.56, according to S&P.
Key takeaways from Caterpillar’s Q3 results
Caterpillar’s revenue beat analysts’ consensus estimates, giving the quarter some key positives. But investors were likely hoping for more: Shares tumbled 9.5% to $645.53 immediately after the results.
When deciding whether to invest in Caterpillar, consider its valuation, business quality and the latest quarterly results. Read more in the full research report here (it’s free).
