High Gas Turbine Demand, Caterpillar's Order Backlog Soars

Caterpillar, the global leader in internal combustion engines, has reported better-than-expected first-quarter results, with revenues of $17.42 billion, a 22% year-over-year increase, higher than the estimated $16.24 billion; adjusted earnings per share were $5.54, far exceeding the estimated $4.63; net profit grew by 34% year-on-year, and the EBITDA margin was 18.0%.

The Power and Energy segment's revenue grew by 22% year-on-year, with the demand for power generation equipment surging by 48%, driven by the explosive growth in gas engine and turbine orders, while the oil and gas business maintained a robust growth of 16%.

The company has raised its revenue forecast for the power generation business by 2030 from the previous "more than double by 2024" to "more than triple," demonstrating the management's strong confidence in the long-term growth of AI electricity demand. The construction machinery segment also performed exceptionally, with revenue increasing by 38% year-on-year, benefiting from the global infrastructure recovery and dealer restocking.

Orders on hand have soared to $62.7 billion, up +79% year-on-year and +22% sequentially, with extremely high visibility. Heavy-duty engine orders are scheduled until 2031, light-duty engines until 2029, and gas engine orders are also increasing in line, with delivery cycles generally between 2028 and 2030.

From an industry perspective, North American data centers are facing the dual bottlenecks of aging power grids and interconnection delays, with the power supply structure accelerating the shift from "grid electricity + diesel generation" to "wind-solar-storage + gas internal combustion engine/SOFC" microgrid models. Out of the 7 planned GW-level projects, 4 have already been equipped with storage, and it is expected that by 2026 and 2027, the US large-scale energy storage installations will reach 80GWh and 115GWh respectively, with global gas turbine order capacity increasing by nearly 50% year-on-year.

The previously released GE Vernova and Baker Hughes financial reports have already signaled a high demand for gas turbines, and Caterpillar has once again confirmed this trend with performance that exceeds expectations. As Mitsubishi Heavy Industries and Siemens Energy are set to release their financial reports, the high demand for global power generation equipment is expected to continue to be validated, with energy infrastructure becoming one of the most certain directions for the next decade.