MW Caterpillar says tariffs could lead to up to $350 million in short-term costs

By Steve Gelsi

Lower sales impact Q1 results, as profit falls short of analyst estimates

Caterpillar Inc.'s stock rose 2% in premarket trading on Wednesday after the earth-moving-equipment maker lifted its 2025 revenue outlook excluding tariffs, but said it is expecting up to $350 million in extra costs from import levies in the second quarter.

Caterpillar $(CAT)$ said second-quarter sales and revenue will be similar to the year-ago quarter, with an "additional cost headwind" of $250 million to $350 million from tariffs, net of mitigation actions and cost controls.

Adjusted operating profit margin in the second quarter will be below the year-ago level due mostly to lower price realizations before any tariff impact, the company said.

Analysts expect Caterpillar to report second-quarter adjusted profit of $5.14 a share, below the year-ago result of $5.99 a share, according to FactSet data.

Analysts are also looking for second-quarter revenue of $15.58 billion, below the year-ago result of $16.69 billion.

Looking ahead at full-year 2025 excluding tariffs, Caterpillar expects "about flat" sales and revenue, which is ahead of its previous expectations of down slightly.

Analysts expect Caterpillar to generate full-year 2025 revenue of $62.54 billion, below the full-year 2024 reported revenue of $64.81 billion.

For full-year 2025 with tariffs, Caterpillar said it expects sales and revenue to be down slightly compared with 2024, which was in line with its earlier guidance. The company said this projection also includes "negative economic growth" in the second half of this year.

Excluding tariffs, Caterpillar expects "about flat" sales and revenues for full-year 2025, which is ahead of its previous expectations of down slightly.

For the first quarter, Caterpillar said its profit fell to $2 billion, or $4.20 a share, from $2.86 billion, or $5.75 a share, in the year-ago quarter.

Caterpillar's adjusted first-quarter profit of $4.25 a share fell short of the FactSet consensus estimate of $4.35 a share.

First-quarter revenue fell 10% to $14.2 billion, below the analyst projection of $14.72 billion.

"The decrease was primarily due to lower sales volume of $1.1 billion and unfavorable price realization of $250 million," the company said. "Lower sales volume was mainly driven by the impact from changes in dealer inventories."

Ahead of Wednesday's trading, Caterpillar's stock is down 15.3% in 2025, while the S&P 500 SPX has fallen 5.5% so far this year.

-Steve Gelsi

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April 30, 2025 07:32 ET (11:32 GMT)

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