Caterpillar Inc (CAT)

[DewDiligence]

CAT reports 2Q25 results—quantifies (large) tariff headwind:

https://www.caterpillar.com/content/dam/caterpillarDotCom/releases/2q25/2q25-caterpillar-inc-financial-results.pdf

• 2025 incremental tariffs are expected to cost the company $1.3-1.5B, including a ~$350M hit in 2Q25 and an expected $400-500M hit in 3Q25 (which leaves $450-750M for 4Q25). (Three months ago, CAT estimated that the full-year 2025 tariff hit would be $350M, but that estimate was based on much less information than is available now.) Almost all of the tariff headwind comes from imported parts rather than finished goods.

• 2Q25 sales (excluding CAT Financial revenue) were $15.67B, -1% YoY. Volume and pricing contributed +1% and -2%, respectively.

• 2Q25 sales in the Construction segment (comprising 43% of non-financial corporate sales) were $6.68B, -7% YoY.

• 2Q25 sales in the Resources Industries (mining equipment) segment (comprising 20% of non-financial corporate sales) were $3.21B, -4% YoY.

• 2Q25 sales in the Energy & Transportation segment (comprising 47% of non-financial corporate sales) were $7.34B, +7% YoY.

• Note: The three business segments above sum to more than 100% of corporate non-financial sales due to inter-segment sales, which are removed from the total sales number.

• 2Q25 GAAP EPS was $4.62, down from $5.48 in 2Q24.

• 2Q25 non-GAAP EPS, which excludes restructuring costs, was $4.72, down from $5.99 in 2Q24.

CAT does not provide specific guidance for sales or EPS, but it stated today that full-year 2025 sales are expected to be slightly up from 2024, an upgrade relative to prior guidance.


2Q25 CC slides: https://s25.q4cdn.com/358376879/files/doc_financials/2025/q2/2Q-2025-Analyst-Slide-Deck-Final.pdf