Caterpillar machinery at a property in Chillicothe, Ill., in 2017.Carlo Allegri/Reuters
Caterpillar CAT-N warned of a US$2.6-billion hit from tariffs in 2026, even as it reported a rise in fourth-quarter revenue and profit on sustained demand for its power-generation equipment amid a rapid build-out of data centres.
The world’s largest construction and mining equipment maker reported an adjusted profit of US$5.16 per share for the quarter ended Dec. 31, up from US$5.14 per share a year earlier. Revenue rose to US$19.1-billion from US$16.2 billion.
The company had said in October, 2025, it expects annual tariff costs between US$1.6-billion and US$1.75-billion.
Caterpillar said its operating profit fell 9 per cent in the quarter to US$2.66-billion, driven mainly by US$1.03-billion of unfavourable manufacturing costs, largely tied to higher tariffs.
The surge in artificial intelligence adoption is driving demand for computing power and pushing tech heavyweights to invest billions in new data-centre infrastructure, boosting demand for Caterpillar’s backup power generators.
The company, seen as a bellwether for the global industrial economy, has also raised prices on its industrial equipment, supporting margins and countering a softness from a recovering construction equipment business.
Analysts expect the construction segment to return to growth in 2026, supported by stronger dealer orders, stabilizing non-residential construction activity, and increased rental fleet demand.