Caterpillar Inc (NYSE:CAT, ETR:CAT1) has warned that tariffs will have a bigger impact on its financial results this year, sending shares down 3% in extended trading.
The company now expects a net tariff hit of between $1.5 billion and $1.8 billion in 2025, it said in an SEC filing overnight, up from its previous forecast of up to $1.5 billion.
Incremental tariffs are expected to cost at least $500 million in the third quarter alone.
The Trump administration’s latest tariffs, announced on July 31, target imports from dozens of countries, including Canada, the EU, Japan and India, raising costs across Caterpillar’s supply chain, with the company importing key components such as sensors, even as manufacturers move to localise production.
Caterpillar said: “While the company continues to take initial mitigating actions to reduce this impact, trade and tariff negotiations continue to be fluid.”
As a result, the company expects its adjusted operating profit margin to come in at the bottom of its target range. However, Caterpillar left its full-year sales and revenue outlook unchanged.