Caterpillar Roars Ahead on Record Power and Energy Sales

Caterpillar, the 100-year-old manufacturer of heavy machinery and industrial equipment, has seen its shares jump 12% to post their best day on the market in 17 years. The company's strong second-quarter results exceeded expectations on nearly every measure, with revenue reaching a record US$20.54 billion, up 24%. Adjusted earnings came in at US$8.17 per share against the forecast of US$6.20.

The driving force behind Caterpillar's success is its power and energy business, which saw sales climb 72% for large generator sets and turbines used to run data centers. This growth is particularly notable as demand for power equipment has been increasing due to the expansion of data centers.

Caterpillar's backlog hit a record US$72.1 billion, up 92% from the previous year, with some orders stretching out to 2030. Chairman and CEO Joe Creed believes that demand for this type of power will hold up and has raised the company's long-term growth target to between 6% and 9% per annum through 2030.

The company plans to nearly triple capacity at its large engine plants, which build generator sets in high demand by data center operators. This expansion is a testament to Caterpillar's role as a key player in the energy infrastructure sector.