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Caterpillar Inc. (NYSE: CAT) has warned that U.S. tariffs could reduce its 2025 profits by up to $1.5 billion (A$2.3 billion), posing a significant headwind to its financial performance.
🔍 Q2 FY25 Financial Highlights
- Operating Profit: Fell 18% year-over-year to $2.86 billion
- Adjusted EPS: Declined 21% to $4.72
- Sales & Revenue: Down 1% to $16.6 billion
- Tariff Impact: Estimated Q2 cost near the upper end of the $250 million–$350 million range
The decline in operating profit was primarily attributed to unfavourable manufacturing costs, driven by higher tariffs and negative price realisation, although this was partially offset by increased sales volumes.
📊 Full-Year Outlook
Caterpillar expects FY25 sales and revenues to be slightly higher than FY24, but forecasts a net incremental tariff impact of $1.3 billion to $1.5 billion.
- Operating Profit Margin:
- Top half of target range excluding tariff impact
- Bottom half including tariff impact
CEO Joe Creed acknowledged the tariff pressures but highlighted the company’s operational resilience and strong demand across segments, supported by infrastructure investment and energy sector growth.
“Impact of tariffs was around the top end of our estimated range for the quarter and it’s likely to be a more significant headwind to profitability in the second half of 2025,” Creed stated.
📈 Stock Performance
- Closing Price (Tuesday): $434.23 (+$0.51 / +0.12%)
- After-Hours Trading: Rose to $434.92
- Market Capitalisation: $204.22 billion
- 12-Month Gain: +38%, approaching record high of $441.15
🏗️ Company Overview
Founded in 1925, Caterpillar operates in over 190 countries and is one of the world’s largest producers of construction and mining equipment.
Caterpillar World Headquarters Picture by Roger W
