Caterpillar NYSE: CAT Chairman and CEO Joe Creed said the company has started 2026 with strong demand across its three operating segments, supported by power-generation activity, construction equipment sales and improving orders in resource industries.
Speaking at a Wells Fargo Securities event, Creed said Caterpillar raised its 2030 revenue target earlier this year to growth of 6% to 9% versus 2024 levels after continued demand discussions with customers. The company also increased planned investment in large-engine capacity to three times its 2024 level.
“We had a good year in 2025, but really off to a really amazing start to the year in the first half in 2026,” Creed said. He added that Caterpillar expects mid- to high-teens top-line growth, while operating profit after capital charge, or OPACC, has also increased strongly.
Power and Energy Demand Drives Capacity Investments
Creed said Caterpillar’s power and energy business continues to see strong backlog growth, with demand spanning power generation, oil and gas, natural-gas compression, mining and marine applications. The company is increasing production capacity for turbines and large reciprocating engines while also seeking to improve throughput from existing facilities.
Large-engine capacity additions have been running slightly ahead of plan, by roughly two to three months, according to Creed. Turbine capacity additions are proceeding according to plan. He cautioned that capacity growth will not follow a completely smooth path, citing the operational complexity of expanding factories and supply chains while production is running at high levels.
Caterpillar is also examining ways to use its existing manufacturing footprint to add output more quickly. Creed said the company repurposed its Wamego facility for Solar Turbines packaging in 12 months and has resumed production of a 10-megawatt medium-speed engine for power-generation use. It is also considering whether a facility with locomotive-engine capacity could produce large Cat engines with relatively modest investment.
While investors have raised concerns that industry capacity additions could eventually outpace demand, Creed said customer behavior has not yet indicated a slowdown in power-generation needs. He described Caterpillar’s approach to adding capacity as measured and based on discussions with customers, including hyperscalers, data-center operators and oil-and-gas companies.
“We have a really strong backlog into the next two years of line of sight, starting to take orders into 2029, even our first order into 2030 on turbines,” Creed said.
The company uses framework agreements with certain large customers to reserve production slots before those commitments become firm backlog orders. Under that process, Caterpillar and customers conduct rolling demand-planning discussions, sometimes extending three to five years. Creed said the model gives the company visibility beyond reported backlog while preserving flexibility for customers to adjust delivery schedules.
Behind-the-Meter Power Opportunities Expand
Creed said Caterpillar is seeing increased interest in natural-gas prime-power systems located behind the meter, particularly for data centers. The configuration of each project depends on local grid access, fuel availability and the customer’s desired level of redundancy.
Some systems could initially provide prime power before later becoming peaking or grid-curtailment assets. However, Creed said the majority of projects currently under discussion are expected to operate as long-term prime-power facilities rather than temporary installations.
Caterpillar believes its product range positions it to support varying project designs, including turbines rated up to 38 megawatts and reciprocating engines as large as 10 megawatts, as well as smaller offerings. Creed also said greater use of gas-fired generation could increase demand for natural-gas compression equipment used in gathering and transmission.
On profitability, Creed said Power and Energy’s more than 40% incremental margin in the second quarter included some noise from enterprise-level items and prior-period tariff adjustments. He said Caterpillar expects healthy incremental margins but intends over time to operate around the middle of its stated margin range.
Construction Rental and Mining Activity
In Construction Industries, Creed said Caterpillar has outperformed the industry over the past 18 months, aided by merchandising programs, commercial-excellence efforts and the Cat Compact initiative aimed at smaller equipment buyers. He said sales to users and dealer rental-fleet loading have both grown.
The company is emphasizing rental as part of a broader commercial offering rather than as a separate strategy, Creed said. Caterpillar wants dealers to provide customers the appropriate solution for a specific job, whether renting, buying or combining both approaches. A dealer joint venture focused on major projects is intended to help Caterpillar participate in large projects where an individual dealer may not have enough rental fleet capacity.
Creed said Caterpillar has the needed product portfolio for its rental strategy, including telehandlers produced internally and allied-equipment partnerships. The company is also ramping production in some Construction Industries facilities to better align supply with demand.
In Resource Industries, Creed said order intake has improved this year, particularly for large mining trucks, and backlog has increased. Customers are requesting more quotes, and Caterpillar has additional autonomous trucks scheduled to enter service. He characterized mining as a potentially steadier long-term growth opportunity, supported by demand for minerals needed for infrastructure and electrification.
Technology Remains Central to Strategy
Creed said technology is the middle pillar of Caterpillar’s growth strategy, encompassing current machine technology, digital planning tools, remote operation, semi-autonomy and autonomy. The company is seeking to increase use of existing technology by making more features standard on premium machines and making those tools easier for operators to use.
He highlighted work around the Cat AI Assistant and efforts to make systems such as Dig Assist, Swing Assist and Cat Command more intuitive. Caterpillar sees wider adoption of those technologies as a path toward greater customer productivity, safety and eventual broader deployment of autonomous equipment.
About Caterpillar (NYSE:CAT)
Caterpillar Inc is a global manufacturer of construction, mining, and industrial equipment. The company's products include excavators, dozers, wheel loaders, motor graders, articulated trucks, and off-highway trucks, as well as related attachments and work tools. Caterpillar also supplies replacement parts, equipment services, technology solutions, and rental support through its dealer network.
The company serves customers in construction, mining, quarrying, energy, transportation, forestry, agriculture, and government-related industries.
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