Caterpillar beat on profit and kept its 2026 outlook unchanged, and its shares fell about 9%. Quanta Services grew revenue 57%, raised every 2026 target and rose about 6%. The clearest difference was guidance, though other explanations for Caterpillar's drop also circulated.
Two companies tied to the build-out of data centers and power grids reported on Thursday morning. Both said orders were piling up. The market rewarded the one that said so in its forecast.
Caterpillar: a beat that kept the year where it was
Caterpillar reported third-quarter sales and revenues of $20.7 billion, up 17%, above the $20.55 billion analysts polled by LSEG expected, though estimates from other providers ranged up to about $20.76 billion. Adjusted profit per share was $7.20, against $4.95 a year earlier and an estimate of $7.08. Operating profit rose 38% to $4.2 billion, and the operating margin widened to 20.4% from 17.3%. A lower tax rate, 22.9% against 26.7%, also helped. The company returned $2.0 billion to shareholders.
"Our third-quarter results reflect the durability of our end markets, with strong order rates and a record backlog," said Joe Creed, the chief executive.
What Caterpillar did not do was raise its outlook. It held its forecast for 2026 sales growth in the mid-to-high teens, Reuters reported, against analysts' expectations of about 18%.
The shares fell as much as 12% and were down about 8.6% at about $652 in early afternoon, from $713.38.
Quanta: a beat that moved the year
Quanta Services, which builds electric grid infrastructure, reported third-quarter revenue of $12.01 billion, up 57% from $7.63 billion. Adjusted earnings were $6.06 a share, against $3.33 a year earlier and about $5.02 expected. Remaining performance obligations were $41.8 billion and total backlog a record $63.7 billion. The company raised its 2026 expectations across all metrics.
Quanta rose about 5.6% to about $641.
Why the market split
Both companies are exposed to spending on power and infrastructure. Both described record order books. The most visible difference was what each said about the rest of the year.
Caterpillar's growth rate is less than a third of Quanta's, and it did not raise guidance when analysts expected it to. For a stock priced for a raise, that was likely a disappointment. Quanta raised everything, and its backlog of $63.7 billion is more than five times its quarterly revenue.
Other explanations for Caterpillar's drop also circulated, including sales in its construction business that came in slightly below estimates and selling across AI-linked stocks.
Quality or caution?
The bullish reading of Caterpillar: margins expanded sharply, the backlog is a record, and holding the outlook may be conservatism from a company that has beaten estimates.
The cautious reading: a cyclical company at a high valuation, growing more slowly than investors assumed, faces a tough comparison next year, while companies like Quanta that are more directly tied to grid spending are still raising forecasts.
What to watch
Caterpillar's backlog and dealer inventory detail in its quarterly filing, its 2027 outlook in January, Quanta's backlog conversion in the fourth quarter, and results from other grid and power suppliers.