Caterpillar's record-breaking sales and $72 billion backlog are currently being weighed against significant tariff costs, creating a balanced risk profile for the industrial giant.
Caterpillar's record backlog and strong sales are offset by roughly $2.2 billion of expected 2026 tariff costs and margin pressure, leaving the risk profile balanced.
Caterpillar reported its largest quarter in history, supported by a $72 billion order backlog and a 24% year-over-year sales increase. Despite these record figures, the company faces a $2.2 billion tariff burden for 2026, which threatens to compress operating margins toward the lower end of management's target range.
Tariffs are acting as a significant headwind, with management expecting costs to push full-year 2026 adjusted operating margins toward the bottom of their target range.