Caterpillar Inc (NYSE:CAT, ETR:CAT1) shares edged lower as the construction and mining equipment manufacturer said it expects tariff costs of up to $1.5 billion for 2025.
The company’s CFO Andrew Bonfield told investors on its Q2 earnings call on Tuesday that Caterpillar expects a tariff impact of $1.3 billion to $1.5 billion this year.
For Q3 alone, he warned tariffs would have a $400 million to $500 million impact, affecting its manufacturing costs and profit margins.
This comes as the company reported a 1% year-over-year decline in Q2 revenue to $16.57 billion, beating Wall Street forecasts of $16.38 billion.
Adjusted earnings per share were $4.72, down from $5.99 in the year-ago quarter and missing estimates of $4.88.
Operating profit margin was 17.3% for the quarter, compared to 20.9% in the year-ago period.
The company attributed its decline in profit to unfavourable manufacturing costs, which largely reflect the impact of higher tariffs.
“The Caterpillar team remained focused on customer success and demonstrated solid operational performance this quarter,” Caterpillar CEO Joe Creed said in a statement.
“We continued to see strong orders across our segments as demand remains resilient supported by infrastructure spending and growing energy needs.”
Shares of Caterpillar traded down 0.6% at $431 in early trade on Tuesday.