The Rising Influence of Rising Affluence

[DewDiligence]

CAT reports record 3Q25 sales—updates guidance for tariff headwind:

https://www.prnewswire.com/news-releases/caterpillar-reports-third-quarter-2025-results-302598229.html

• 2025 incremental tariffs are now expected to cost the company $1.6-1.75B, up from the prior guidance of $1.3-1.5B three months ago; the new guidance implies $650-$800M during 4Q25. Almost all of the incremental tariffs come from imported parts rather than finished goods.

• 3Q25 sales (excluding CAT Financial revenue) were a record $16.73B, +10 YoY. The 10% YoY increase was comprised of: volume +10%; pricing -1%; and currency +1%.

• 2Q25 sales in the Construction segment (comprising 40% of non-financial corporate sales) were $6.76B, +7% YoY.

• 2Q25 sales in the Resources Industries (mining equipment) segment (comprising 19% of non-financial corporate sales) were $3.11B, +2% YoY.

• 2Q25 sales in the Energy & Transportation segment (comprising 50% of non-financial corporate sales) were $8.40B, +17% YoY. This is the business segment that makes reciprocating engines to power AI data centers (#msg-176770236).

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 $4.88, down from $5.06 in 2Q24. The decrease was primarily due to an increase in the 3Q25 tax rate and a discrete tax item during the quarter.

• 2Q25 non-GAAP EPS, which excludes restructuring costs, was $4.95, down from $5.17 in 3Q24 for the same reasons as above.

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


3Q25 CC slides:
https://investors.caterpillar.com/files/doc_financials/2025/q3/3Q-2025-Analyst-Slide-Deck-vFinal.pdf