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Call sheet · Q1'26

Caterpillar (CAT)

Q1'26 earnings call · held April 30, 2026 · compared with the Q4'25 call · management-credibility review
10/12
Disclosure score
2 medium, 5 low flags
Financial quality
Bottom line
The sleeper story is capacity acceleration from 2x to 3x - CAT just made their biggest bet ever on data center power demand with 'better line of sight to return than anyone we've ever made.' Everyone will focus on the 22% revenue growth, but the real binding constraint is delivery timeline visibility. Despite massive capacity investments, they still can't deliver more than 62% of backlog within 12 months. That's an execution risk if demand volatility returns. Most concerning: they stopped tracking tariff mitigation actions because it's 'increasingly challenging' - code for 'we're not making progress.' My view changes if they show actual delivery timeline improvement or restart transparent tariff mitigation reporting.

The 30-second version

  • Large engine capacity quietly accelerated to 3x (not 2x) - this is the real story
  • Record $63B backlog but only 62% deliverable in next 12 months signals visibility issues
  • Tariff mitigation stalled - they stopped breaking out actual mitigation actions

What changed this quarter

MetricQ4'25Q1'26Change
Sales & Revenues$19.1B (18% YoY)$17.4B (22% YoY)Lower absolute but higher growth rate
Adjusted EPS$5.16$5.54 (30% YoY)+$0.38, significant acceleration
Backlog$51B (71% YoY)$63B (79% YoY)+$12B sequential, acceleration
Operating Margin15.6%18.0%+240 bps quarter improvement
Power & Energy Sales$9.4B (23% YoY)$7.0B (22% YoY)Growth rate stable despite capacity constraints
Construction Industries Sales$6.9B (15% YoY)$7.2B (30% YoY)Massive acceleration +1500 bps
Resource Industries Sales$3.4B (13% YoY)$3.8B (4% YoY)Sharp deceleration -900 bps
Tariff CostsNear top of range (est $800M)$600M (vs $800M est)Favorable but due to 2025 adjustment
Free Cash Flow$3.7B$600MMassive sequential decline
Share RepurchasesNot specified$5B (incl $4.5B ASR)Aggressive buyback acceleration

Accountability tracked

8 new promises made4 narrative shifts flagged7 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
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Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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