.jpg)
3 hours ago
2
Article content
(Bloomberg) — Caterpillar Inc. laid out new growth targets to boost revenue and double capital spending in a bid to capitalize on rising demand for energy to power data centers.
THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY
Subscribe now to read the latest news in your city and across Canada.
- Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.
- Daily content from Financial Times, the world's leading global business publication.
- Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.
- National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.
- Daily puzzles, including the New York Times Crossword.
SUBSCRIBE TO UNLOCK MORE ARTICLES
Subscribe now to read the latest news in your city and across Canada.
- Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.
- Daily content from Financial Times, the world's leading global business publication.
- Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.
- National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.
- Daily puzzles, including the New York Times Crossword.
REGISTER / SIGN IN TO UNLOCK MORE ARTICLES
Create an account or sign in to continue with your reading experience.
- Access articles from across Canada with one account.
- Share your thoughts and join the conversation in the comments.
- Enjoy additional articles per month.
- Get email updates from your favourite authors.
THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.
Create an account or sign in to continue with your reading experience.
- Access articles from across Canada with one account
- Share your thoughts and join the conversation in the comments
- Enjoy additional articles per month
- Get email updates from your favourite authors
Sign In or Create an Account
or
Article content
The company is looking to generate $30 billion in services revenue between last year and 2030, while raising its adjusted operating profit margin to $60 billion to $100 billion in the same period, it said on Tuesday. That’s up from a previous estimate for $42 billion to $72 billion.
Article content
Article content
The new goals, detailed in presentation slides ahead of Caterpillar’s annual Investor Day on Tuesday, are part of the century-old machinery maker’s bid to transform itself into an energy services heavyweight. Caterpillar’s power generators and turbines, used for data centers, have become the company’s fastest-growing business as demand for artificial intelligence takes off globally, marking a shift from the company’s focus on bulldozers and diggers.
Article content
Article content
The firm’s growth targets “reinforce the key theme coming out of earnings last week,” said Michael O’Rourke, chief market strategist at JonesTrading. “The company is a literal picks-and-shovels play on data center buildouts.”
Article content
By signing up you consent to receive the above newsletter from Postmedia Network Inc.
Article content
Shares of Caterpillar soared last week after the firm reported a 17% jump in revenue from its energy and transportation division.
Article content
To help reach its projections, the firm unveiled plans on Tuesday to increase capital spending and capacity across its business divisions. It plans to more than double its capacity of gas turbines, which convert fuel into energy to produce electricity, while also doubling its capacity of large engines.
Article content
The boost in turbine capacity comes amid an explosion in energy consumption from data centers. Demand for gas hit a record last year, while suppliers of turbines struggled to keep up with orders.
Article content
The company also said it’s targeting a 5% to 7% compound annual growth rate in sales and revenue from 2024 through 2030.
Article content
On Tuesday, the firm said it will change the name of its Energy & Transportation unit to Power & Energy to focus on “historic growth” within power generation services in the coming years. Its transportation services will be moved to the company’s Resource Industries segment.
Article content
(Adds more details throughout)
Article content
English (US)