Al Root

Caterpillar stock rose early Tuesday after the company announced a CEO transition. The machinery maker is filling its top executive role from inside the company.

Shares were up 0.6%, while the S&P 500 and Dow Jones Industrial Average were up 0.7% and 0.5%, respectively.

It isn't a big move because there was no major surprise -- typically a good thing for investors.

Chief operating officer Joseph Creed is taking over for James Umpleby as of May 1. Creed has been at Cat for 28 years. Umpleby has served for 45 years, with the last eight as CEO.

Through early trading Tuesday, Cat stock has gained about 223% over the past eight years. That is almost 90 percentage points better than the S&P 500.

Since 2017, Cat sales have grown about 5% a year on average and operating profit margins have expanded by about 8 percentage points. Cat's operating profit margin in 2024 landed at almost 21%.

Investors will be happy if Creed can duplicate that performance.

"As we celebrate our 100(th) anniversary, we honor those who came before us establishing a culture of excellence serving our customers," Umpleby said. "I have great confidence in my successor Joe Creed and the entire Executive Office to lead our global team as Caterpillar embarks upon our second century of helping our customers build a better, more sustainable world."

Creed joined Cat in 1997, serving in multiple operating and finance roles. He was promoted to chief operating officer in 2023.

Through early trading Tuesday, Cat stock was down about 17% year to date. Investors are worried about tariffs increasing Cat costs as well as potential retaliation from U.S. trading partners. Tariffs can also result in slower economic growth. That isn't good for Cat either.

Write to Al Root at allen.root@dowjones.com

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April 15, 2025 10:33 ET (14:33 GMT)

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