Caterpillar's global record $20B quarter lifts margins with $392M tariff recovery

Caterpillar's record $20 billion quarter and 73% profit jump, aided by a surprise tariff recovery that lifted operating margin to 21.9%, has reshaped Wall Street's profit outlook. Power & Energy led segment sales with 33% growth on data-center demand; Construction rose 22%, Resource 17%. Backlog reached $72 billion, up 92% year over year. Tariff recoveries totaled $392 million, while ongoing costs fell below guidance. Tariffs had weighed on profits since early 2025; without the recovery, full-year margin would sit near its target range's bottom, but now Caterpillar expects the middle.