Caterpillar Inc.: IEEPA tariff recoveries and volatility driving margin bridge

Caterpillar Inc. 2026 Q2: Financial Performance summary

• Adjusted operating profit was $4.5 billion and adjusted operating profit margin was 21.9%, above expectations.
• Adjusted profit per share was $8.17, up 73% versus last year.
• Backlog grew sequentially by $9 billion to $72 billion and increased by ~92% versus second quarter last year (~$35 billion).
• Capital returned to shareholders totaled $2.2 billion via share repurchases (~$1.5 billion) and dividends; June dividend increased 8% (sixth consecutive year with a high single-digit quarterly increase).
• Cat Financial: past dues were 1.31% (down 31 bps YoY, lowest since 1998) and allowance rate was 0.84% (lowest ever in any quarter).
• MP&E free cash flow was $5.1 billion (record), up about $2.8 billion versus last year; CapEx spend was about $600 million in the quarter.
• Operating profit increased 50% to $4.3 billion, and the 21.9% margin represented a 430 bps increase year over year.
• Sales and revenues were $20.5 billion, up 24% year over year and better than expected.