Caterpillar earnings soar on data center play
Caterpillar reported record revenue, significantly boosted by its power and energy division's sales to data centers across the country. This comes amidst increasing backlash against data centers in local communities, leading Texas Gov. Greg Abbott to announce a moratorium on new data center approvals in the state pending an audit. The D-FW community of Red Oak is also embroiled in controversy regarding its data center hub status.
Caterpillar, headquartered in Irving, Texas, announced record quarterly revenue of $20.5 billion, a 24% increase over the previous year, marking the first time the company exceeded $20 billion in a single quarter. Chairman and CEO Joe Creed attributed this strong financial performance to the dedication of its employees and the essential work of its customers.
The unexpectedly robust quarter was largely driven by Caterpillar's power and energy division, which reported sales of approximately $8.2 billion. This boost stemmed from the increased demand and sales of large engines and turbines primarily used to power data centers. Caterpillar has established multi-year agreements, including one with Hunt Energy to power data centers across North America, and has supplied projects for facilities in Utah, West Virginia, and a substantial Microsoft data center in West Texas.
This positive earnings report for Caterpillar coincides with growing public backlash against data centers in communities throughout Texas and across the country. Concerns typically revolve around immense resource consumption, noise, and light pollution. In response to these issues, Texas Gov. Greg Abbott announced a new statewide moratorium on data center approvals, pending an audit, emphasizing the state's priority to protect its citizens' safety and quality of life. Separately, Red Oak, a community in the Dallas-Fort Worth area that has actively sought to become a data center hub, is currently involved in controversy related to these developments.