What Happened?
Shares of construction equipment company Caterpillar (NYSE: CAT) jumped 12.3% in the afternoon session after the company reported strong third-quarter 2025 results that beat Wall Street's expectations for both revenue and profit.
The company posted revenue of $17.64 billion, representing a 9.5% increase year over year and comfortably surpassing the consensus estimate of $16.62 billion. Its adjusted earnings per share of $4.95 also came in well ahead of the $4.52 analysts had projected. The strong performance was particularly noteworthy as it came during what the industry has experienced as a cyclical downturn. Investors reacted positively to the significant top- and bottom-line beats, which overshadowed declines in other metrics like year-over-year operating margin and free cash flow.
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What Is The Market Telling Us
Caterpillar’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. Moves this big are rare for Caterpillar and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 16 days ago when the stock gained 2.9% as the company announced it agreed to acquire RPMGlobal Holdings, an Australian-based mining software company. The deal, valued at approximately $728 million, was intended to bolster Caterpillar's technological capabilities in the mining sector. By integrating RPMGlobal's software for mine planning and operations, Caterpillar aimed to enhance its asset and fleet management solutions for customers. The acquisition was expected to be finalized in the first quarter of 2026, subject to shareholder and regulatory approvals. Investor optimism about the move was reflected in the stock's performance, as the acquisition was seen as a key step in expanding the company's digital and service offerings.
Caterpillar is up 64.4% since the beginning of the year, and at $591.58 per share, has set a new 52-week high. Investors who bought $1,000 worth of Caterpillar’s shares 5 years ago would now be looking at an investment worth $3,825.
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