Caterpillar’s Earnings Plunge Hits These 3 Popular ETFs Hardest

Quick Read

• CAT dropped 7% after Q3 earnings beat EPS estimates but missed revenue by a razor-thin margin and showed tariff recoveries shrinking from $392M to $128M.

• XLI holds CAT as its largest position at 8.51% of $34 billion in assets, yet still rose 0.55% on the day Caterpillar cratered.

• VYM income investors likely own Caterpillar without realizing it, and combining VYM with XLI and an S&P 500 fund stacks exposure higher than any single fund shows.

• Just released. Our analysts combed the entire stock market and named the ten best stocks to buy right now, and Caterpillar didn’t make the cut. Enter your email to see the names that beat CAT. The report is free. Enter your email and see if any of your stocks made the cut.

Shares of Caterpillar (NYSE:CAT) fell 7.27% to $661.54 in Thursday’s regular session after the company’s third-quarter earnings report. CNBC named Caterpillar and Alphabet (NASDAQ:GOOGL) as the two earnings reports dragging the S&P 500 lower today. Many index fund investors own Caterpillar without choosing it directly. It sits near the top of the most popular industrial funds and inside some of the biggest dividend ETFs held in retirement accounts.

Today’s drop adds to a rough stretch. Caterpillar is down 10.42% over the past week and 19.13% over the past month. Over longer periods it is still well ahead, up 16.47% year to date and 252.29% over five years.

Why Caterpillar Shares Slid After a Profit Beat

Caterpillar released its results at 6:33 AM ET on October 29, 2026 and held its call at 8:30 AM ET. Adjusted EPS came in at $7.20 against a $7.04 consensus. GAAP diluted EPS was $7.13. Revenue of $20.68 billion rose 17.26% year over year while missing expectations of $20.69 billion. The Wall Street Journal’s same-day coverage tied the slide to the revenue miss.

The miss itself was small, a -0.05% revenue surprise. What changed was the quarter-to-quarter comparison. Here is what investors were looking at on October 29:

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• A much smaller beat: In Q2, reported on August 4, 2026, Caterpillar exceeded EPS estimates by 31.83% and revenue estimates by 7%. This quarter the EPS beat narrowed to 2.37%.

• Less tariff relief: Operating profit included $128 million of IEEPA tariff recoveries, compared with $392 million in Q2.

• A lower tax rate: The effective tax rate fell to 22.9% from 26.7% a year earlier, which helped the bottom line.

• Weak spots: Asia Pacific revenue fell 2%, rail retail sales dropped 70%, and Cat Financial’s allowance for credit losses rose to $332 million.

• No numbers on the outlook: Management pointed to strong order rates and a record backlog but provided no numeric guidance.