For anyone who buys gensets, the interesting line in Caterpillar's third-quarter report is not the group total. It is the Power Generation row. The company published its results on 29 October: sales and revenues of $20.682 billion, up 17% from $17.638 billion a year earlier, and adjusted profit per share of $7.20 against $4.95. Management described it as the best sales quarter in the company's history.
Three Rows Inside Power & Energy
The Power & Energy segment sold $8.784 billion, 18% more than last year, and its profit rose 31% to $2.143 billion. The profit margin moved from 21.9% to 24.4%. Inside the segment the three applications behaved very differently. Power Generation reached $3.421 billion, up $787 million or 30%. Oil and Gas came to $2.236 billion, up 13%. Industrial grew 4% to $1.631 billion.
The release says the Power Generation increase came mainly from turbines and turbine-related services and from large reciprocating engines, and it ties the engine growth primarily to data center applications. That is the plain reading of the quarter: the engines and turbines that go into on-site power for data centers carried the segment.
An Order Book Almost Twice Last Year's
The release itself speaks of a record backlog but does not put a dollar figure on it. Manufacturing Dive, summarising the same report, gives $78 billion, nearly double the level of a year ago. For the fourth quarter the company expects moderate sales growth over last year and a higher operating margin, and for the full year growth in the mid-to-high teens. The finance chief said order rates are strong and the backlog keeps growing. Caterpillar is adding production capacity for large reciprocating engines and turbines, which is the part of the business where it is short of supply rather than short of customers.
A related story we reported earlier is the financing tied to Caterpillar capacity for two data centers (the Atlas Energy bridge loan).
What A Full Order Book Does To A Project Schedule
A genset is only one line in a plant. The radiators, piping, exhaust and ventilation are all ordered against the data of the engine that has actually been allocated, so the engine date sets the pace for everything around it. When a manufacturer of this size is working through a backlog of this size, the useful question for a project team is not the quoted lead time on the day of the enquiry. It is the date on which the engine type, rating and fuel are confirmed in writing, because the other suppliers can only freeze their packages after that. More on engine-driven power generation and data center supply is on our application pages.
Sources: Caterpillar (PR Newswire), Manufacturing Dive
