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Caterpillar Projects Billion-Dollar Hit From Tariffs
UNITED STATES, AUG 5 – Caterpillar faces up to $1.5 billion in tariff costs for 2025 amid falling demand and rising manufacturing expenses, with North American sales down 2%, company reports.
- Caterpillar Inc., based in Irving, Texas, reported a lower second-quarter profit in 2025 due to sluggish demand and tariff costs, with shares falling about 4% in premarket trading.
- The company anticipates facing up to $1.5 billion in additional tariffs in 2025, with a significant portion—estimated between $400 million and $500 million—expected to impact the third quarter, which has been a major factor contributing to higher manufacturing expenses.
- Despite a 1% sales decline to $16.7 billion and a 24% drop in operating profit, Caterpillar's energy and transportation segment saw higher sales and the company noted resilient demand supported by infrastructure spending and energy needs.
- Adjusted earnings declined to $4.72 per share in the second quarter, falling short of the $4.88 analyst consensus, while the company anticipates its 2025 adjusted profit margins will land in the lower portion of its targeted range due to the effects of tariffs.
- Caterpillar's 2025 outlook reflects tariff-driven margin pressure and slowing construction demand, though annual sales are forecasted slightly higher and the firm offsets cost inflation with price hikes amid broader industry supply-chain shifts.
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Caterpillar projects billion-dollar hit from tariffs
One of North Texas' largest public companies projects up to $1.5 billion in tariff costs this year. The news came in Caterpillar's second quarter earnings on Aug. 5, where it reported a slight drop in revenue. Still, Wall Street is optimistic about the future of the company.
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