Oct 29 (Reuters) – Caterpillar topped third-quarter earnings estimates on Thursday, but maintained its annual sales growth forecast despite strong demand for its backup power equipment, sending its shares down about 9% in premarket trading.
The company garnered a windfall from an AI-fueled expansion of data centers across the US, which requires everything from construction equipment to generators, but the headwinds have turned amid growing concerns over data center opposition and calls to slow down AI development.
Caterpillar maintained its full-year sales outlook, expecting revenue growth in the mid-to-high teens, unchanged from the last quarter.
Its shares have dropped close to a fifth since its second-quarter results, as investors grew more cautious about the AI boom, with higher scrutiny of spending on data centers and concerns over whether the massive investments will generate sufficient returns.
The company builds power generators and backup power equipment under its power and energy segment, while its construction industries segment manufactures excavators and bulldozers.
Its quarterly revenue rose 17% to $20.7 billion, also topping analysts’ forecast of $20.55 billion, according to data compiled by LSEG.
The company, seen as a bellwether for the global industrial economy, reported an adjusted profit of $7.20 per share for the quarter through September, compared with $4.95 per share a year earlier. Analysts expected it to report a quarterly profit of $7.08 per-share.
Caterpillar said its third-quarter operating profit included $128 million in benefits related to IEEPA tariff recoveries.
(Reporting by Nandan Mandayam and Nathan Gomes in Bengaluru; Editing by Shinjini Ganguli)
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