CAT · 10-Q · 2026Q2 · Full report

Gross Margin Drivers

CATERPILLAR INC · 2026-08-05 · Importance 26 · Surprise 24 · In source text

Power & Energy’s second-quarter profit benefited from $457 million of higher-volume impact and $212 million of favorable price realization, partly offset by $149 million of unfavorable manufacturing costs. For the six months, Power & Energy recorded $892 million of volume benefit and $320 million of favorable price realization, offset in part by $495 million of unfavorable manufacturing costs. Resource Industries’ six-month profit was reduced by $376 million of unfavorable manufacturing costs, primarily reflecting higher tariff costs. The company expects higher volume and favorable price realization in 2026 to be partly offset by unfavorable manufacturing costs and higher SG&A and R&D expenses.

Key facts

• Company expects profit impact of higher sales volume and favorable price realization in 2026 to be partially offset by unfavorable manufacturing costs and higher SG&A/R&D expenses. source
• For the six months ended June 30, 2026, Power & Energy profit increase drivers: higher sales volume $892 million and favorable price realization $320 million, partially offset by unfavorable manufacturing costs $495 million. source
• Power & Energy Q2 2026 profit increase drivers: higher sales volume $457 million and favorable price realization $212 million, partially offset by unfavorable manufacturing costs $149 million. source
• Resource Industries Q2 2026 profit increase drivers: profit impact of higher sales volume $269 million, partially offset by unfavorable manufacturing costs $158 million. source
• Resource Industries six months profit decreased by $115 million to $1.071 billion, primarily due to unfavorable manufacturing costs of $376 million and higher SG&A/R&D expenses of $113 million, partially offset by profit impact of higher sales volume $333 million and favorable price realization $36 million. source

Impact estimates