Caterpillar Inc.

Farm & Heavy Construction Machinery • Industrials • Irving, TX, United States • CAT (NYQ)

972 891 7700 5205 North O'Connor Boulevard, Irving, TX 75039, United States

Quarter: Q3 2025 Reported: August 28, 2025 Sentiment: Negative

Caterpillar Inc. manufactures and sells construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives in the United States and internationally. Its Construction Industries segment offers asphalt pavers, cold planers, compactors, forestry machines, material handlers, motor graders, pipelayers, road reclaimers, telehandlers, track-type tractors, and track and wheel excavators; compact track, wheel, track-type, backhoe, and skid steer loaders; and related parts and tools. The company's Resource Industries segment provides electric rope and hydraulic shovels, draglines, rotary drills, hard rock vehicles, tractors, mining trucks, wheel loaders, off-highway and articulated trucks, wide-body trucks, wheel tractor scrapers and dozers, fleet management products, landfill and soil compactors, machinery components, autonomous ready vehicles and solutions, work tools, and safety services and mining performance solutions, as well as related parts and services. Its Energy & Transportation segment offers reciprocating engine powered generator sets; reciprocating engines, drivetrain, and integrated systems and solutions; turbines, centrifugal gas compressors, and related services; and diesel-electric locomotives and components, and other rail-related products. The company's Financial Products segment provides operating and finance leases, installment sale contracts, revolving charge accounts, repair/rebuild financing services, working capital loans, and wholesale financing; and insurance and risk management products and services. Its All Other segment offers wear and maintenance components; parts distribution; logistics solutions and distribution services; dealer portfolio management, and brand management and marketing strategy services; and digital investment services. Caterpillar Inc. was founded in 1925 and is headquartered in Irving, Texas.

Analysis Summary

Caterpillar Inc. provided a pre-emptive update via an 8-K filing on August 28, 2025, detailing the revised estimated impact of tariffs on its financial results for Q3 and the remainder of 2025. This update precedes the official Q3 earnings announcement scheduled for October 29, 2025. The company stated that subsequent to its Q2 earnings release on August 5, 2025, additional clarifications and new tariffs have been announced, necessitating a revision to its financial outlook regarding tariff impacts.

Specifically, Caterpillar now expects the net impact from incremental tariffs introduced in 2025 to be between approximately $500 million to $600 million for the third quarter. For the full year 2025, this estimated net impact has increased to approximately $1.5 billion to $1.8 billion. As a direct consequence of these increased tariff costs, the company anticipates its full-year adjusted operating profit margin will be near the bottom of its previously communicated target margin range. Despite the significant increase in projected tariff expenses, management confirmed that the revised estimated net impact from tariffs is not expected to affect the company's sales and revenue outlook, which was provided during the second quarter earnings call. The company also noted it is taking initial mitigating actions to reduce this impact, acknowledging the fluid nature of trade and tariff negotiations. The filing also included standard forward-looking statements and a comprehensive list of risk factors that could materially affect actual results.

Key Highlights

• Revised Q3 2025 tariff impact estimated at $500M - $600M.
• Full-year 2025 tariff impact revised to $1.5B - $1.8B.
• Full-year adjusted operating profit margin expected near bottom of target range.
• Sales and revenue outlook for 2025 remains unchanged.
• Company is taking initial mitigating actions against tariff impacts.
• Update issued due to new tariff clarifications and additions since Q2 earnings.

Financial Metrics

eps

revenue

guidance

net income

Stock Performance (90 Days)

Data through Dec 29, 2025

Layoff Events

Earnings Calls

Positive Signals

• Sales and revenue outlook remains unchanged despite tariff headwinds.
• Company is actively taking initial mitigating actions to reduce tariff impact.
• Management provided a timely update on evolving trade conditions.
• Commitment to provide further updates in the upcoming Q3 earnings announcement.

Risks & Concerns

— Global and regional economic conditions and conditions in served industries.
— International trade policies and their impact, including new tariffs or changes in existing rates.
— Commodity price changes, material price increases, fluctuations in demand, or significant material shortages.
— The impact of the highly competitive environment on sales and pricing.
— Political and economic risks, commercial instability, and events beyond control in operating countries.