Caterpillar Sees Strong Growth In Energy Segment Fueled By AI Infrastructure Demand

• Caterpillar’s third-quarter adjusted per share profit of $4.95 beat expectations of $4.52.
• CEO Joe Creed said that the largest growth came from power generation, with a 33% increase, primarily due to demand for reciprocating engines for data center applications.
• The company now sees annual tariff costs between $1.6 billion and $1.75 billion, which is up from the previous forecast of $1.5 billion to $1.8 billion.

Caterpillar CEO Joe Creed said on Wednesday that the company witnessed immense growth in its energy and transportation segment during the third quarter, mainly driven by power generation services offered by the industrial giant for AI-related infrastructure.

Demand for AI infrastructure has increased in recent years, with companies heavily investing in data centers. “In Energy and Transportation, we expect strong growth in full year sales for power generation compared to last year. Demand remains robust, driven by data center growth related to cloud computing and generative AI,” Creed said during a post-earnings call.

“The largest growth came from power generation with a 33% increase, primarily due to demand for reciprocating engines for data center applications,” he said. Creed added that turbines and turbine-related services also contributed to power generation growth.

Shares of the company jumped nearly 12% in afternoon trading. Retail sentiment on Caterpillar jumped to ‘extremely bullish’ from ‘bearish’ territory compared to a day ago, with message volumes at ‘extremely high’ levels, according to data from Stocktwits.

Joule Partnership

Joule Capital Partners, Caterpillar and Wheeler Machinery in August announced an agreement to power Joule’s High Performance Compute Data Center Campus in Utah. This initiative will provide four gigawatts of total energy to the center of the Intermountain West.

The project would be powered by a fleet of Caterpillar’s latest G3520K generator sets and support equipment, the distributed generation system produces electricity and captures waste heat to power and cool next-generation, high-density server systems.

“We're definitely really excited about the prime power opportunity with data centers and more broadly, just the demand for power that data centers and broader trends in the industry are putting onto the grid,” Creed said.

Caterpillar’s Q3 Results

The company now sees annual tariff costs between $1.6 billion and $1.75 billion, which is up from the previous forecast of $1.5 billion to $1.8 billion.

Caterpillar’s quarterly revenue came in at $17.6 billion, compared with Wall Street's estimates of $16.72 billion, according to data compiled by Fiscal AI. Its third-quarter adjusted per share profit of $4.95 beat expectations of $4.52.

Shares of the company have gained nearly 62% this year.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Also See: Liberty Media Chairman John Malone To Step Down, Assume Chairman Emeritus Role

Share

·

Add us on