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Caterpillar stock (CAT) surged over 12% on Wednesday, boosting the Dow, after the company reported a third quarter earnings beat and a better-than-expected fourth quarter outlook that outshone the increased impact from tariffs.

The mining and construction machinery maker recorded adjusted profits per share of $4.88, which was above analysts’ estimates of $4.52, according to S&P Global Market Intelligence. The Energy & Transportation segment was a bright spot, with both sales and profits rising 17% versus the third quarter of 2024.

“With a record backlog, strong order rates, and continued growth in sales to users, our outlook has improved since last quarter,” CEO Joseph Creed said. “For the fourth quarter, we anticipate strong sales growth versus the prior year.”

However, Caterpillar said tariffs affected all three of its business segments during the quarter. Going forward, Caterpillar adjusted its forecast for tariff impacts to be between $1.6 billion and $1.75 billion for the full year. Previously, Caterpillar guided for a hit of $1.3 billion to $1.5 billion.

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