Summary

Between 2019 and 2025 Caterpillar went through three distinct phases: the across-the-board crash of 2020 (COVID), a 2021-2023 "supercycle" recovery driven mainly by Construction Industries, and finally a rotation between segments that in 2025 brings Power & Energy (formerly Energy & Transportation, powered by demand for data-center engines and turbines) past Construction Industries as the group's most profitable segment for the first time. Net income fell 17.7% in FY2025 despite slightly higher revenue, but the first half of 2026 sharply reverses course: +46.8% profit growth, with Construction Industries back in the lead thanks to dealer inventory restocking.

2019–2025: the full cycle

2020 remains the low point of the period: revenue at $41.7 billion (−22%) and net income at $3.0 billion (−51%), with an across-the-board crash affecting every segment — none spared, on lower end-user demand and dealer destocking. The 2021-2023 recovery is nearly a straight line: revenue climbs to $67.1 billion and net income roughly quadruples to $10.3 billion, driven early on mainly by Construction Industries (dealer restocking, favorable pricing) and increasingly by Energy & Transportation. 2024 marks the absolute peak in net income ($10.79 billion) but already conceals the rotation under way: Construction Industries and Resource Industries begin to decline, propped up by the power/energy segment.

Revenue and net income, full fiscal years · SOURCE — SEC EDGAR, 10-K FY2019–FY2025

FY2025: the rotation completes

In fiscal 2025 net income fell 17.7% (to $8.88 billion) despite revenue growing slightly (+4.3%, to $67.59 billion) — almost entirely the fault of Construction Industries, which lost $1.49 billion in profit (−24%, margin down from 24.2% to 18.7%) on unfavorable price realization and higher manufacturing costs tied to new tariffs. Resource Industries followed the same script on a smaller scale (profit −22%, margin 20.4%→15.9%). The counterweight is Power & Energy: the only segment to grow on both revenue (+11.6%, to $32.2 billion) and profit (+11.9%, to $6.42 billion), driven by Power Generation (+32%, data-center demand). It thus becomes the group's most profitable segment in absolute terms, overtaking Construction Industries for the first time in the period observed.

Segment profit, FY2024 vs FY2025 · SOURCE — 10-K filed 13 Feb 2026

Inside Power & Energy: the push comes from Power Generation

Breaking Power & Energy down by application clarifies where the growth originates: Power Generation rises from $4.47 billion (2019) to $10.28 billion (2025), a sharp acceleration especially from 2023 onward, driven by demand for engines and turbines used in data centers. The other three applications — Oil and Gas, Transportation, Industrial — grow more linearly or remain uncertain (Industrial), never coming close to that pace. Power Generation alone rises from 20% to 32% of the entire Power & Energy segment's sales; the segment as a whole, in turn, now accounts for nearly half of group-wide revenue (from 41% in 2019 to 48% in 2025).

Sales by application inside the Power & Energy segment · SOURCE — "Sales by Application" table, 10-K FY2020–FY2025

The first-half-2026 rebound

The first half of 2026 sharply reverses the 2025 narrative: consolidated net income jumps 46.8% (to $6.14 billion), and Q2 2026 alone reaches $3.59 billion, the highest quarterly figure in the series. The driver is once again Construction Industries: +54% profit growth (to $3.48 billion) on +36% revenue, explained in the 10-Q mainly by dealer inventory restocking (rising in 2026, versus falling in the same period of 2025). Power & Energy keeps growing solidly (+22% profit) but cedes its role as the "engine" of growth. Resource Industries, by contrast, stands out as the only segment still declining in profit in 2026 (−10%), hurt by manufacturing costs/tariffs and higher SG&A/R&D spending despite rising revenue — it is the segment whose profitability stays under structural pressure throughout the whole period observed.

Further reading This company profile is the first in the Company Focus series, dedicated to companies and the strategies with which they have managed — or failed — to adapt and change. The stock is also cited in the Markets Report, among the cases that best illustrate how AI-driven demand also reaches the more traditional segments of industrial mechanics, through demand for physical infrastructure.

Notes

Sources: SEC EDGAR (Company Facts XBRL and MD&A text from the FY2019–FY2025 10-Ks and the most recent 10-Qs of Caterpillar Inc., CIK 0000018230). Q4 2024 and Q4 2025 profit figures are not tagged as discrete quarters in CAT's quarterly XBRL data and are estimated as the difference between the FY profit reported in the 10-K and the sum of the first three quarters. The "Energy & Transportation" segment was renamed Power & Energy between the FY2024 10-K and the FY2025 10-K (same scope); some Resource Industries figures for 2021 and 2024 were marginally reclassified between one 10-K and the next — figures here are reported as published in the 10-K for the relevant year.