Caterpillar (CAT) Q2 2026: First $20B Quarter, EPS Jumps 68%
Caterpillar's profit surge is real, but it is a volume story rather than a pricing story. Sales and revenues reached $20,543 million in the second quarter of 2026, up 24.0% from $16,569 million a year earlier, and operating profit rose 50.2% to $4,295 million. Yet the 20.9% operating margin merely returns the company to where it stood in the second quarter of 2024 (20.9%), and $392 million of that profit came from a tariff refund credit that is not part of the normal operating run rate (Caterpillar's total IEEPA tariff cost was about $1.0 billion; roughly $600 million of further claims remain outstanding but were not yet deemed probable at June 30, 2026). For a cyclical machinery maker that just passed through a weak 2025, the distinction matters: Caterpillar is selling far more equipment at roughly its old margin, powered by an electricity-infrastructure build-out that shows up most clearly in orders not yet delivered.
1. Consolidated Statement of Financial Position
1-1. Principal asset movements
| Item | Dec 31, 2025 ($M) | Jun 30, 2026 ($M) | Change % |
|---|---|---|---|
| Cash and cash equivalents | 9,980 | 6,713 | -32.7% |
| Receivables – trade and other | 10,920 | 13,188 | +20.8% |
| Inventories | 18,135 | 20,627 | +13.7% |
| Property, plant and equipment – net | 15,140 | 15,628 | +3.2% |
| Intangible assets | 241 | 420 | +74.3% |
| Goodwill | 5,321 | 5,859 | +10.1% |
| Total assets | 98,585 | 102,609 | +4.1% |
The cash decline is deliberate, not distress. Caterpillar spent $6,522 million buying back stock in the first half while generating $6,241 million of operating cash. The balance sheet absorbed the difference.
The inventory build deserves a closer look, because its composition is favourable. Raw materials rose 18.8% to $8,831 million and work-in-process rose 30.6% to $2,087 million, while finished goods rose only 6.6% to $9,298 million. Inventory is accumulating at the front of the production line, not the back. That is the signature of a factory ramping to meet booked orders, rather than one stockpiling unsold machines.
