Caterpillar Reveals Poorer Than Anticipated Q1 Revenues, Offers Two Forecast Possibilities
Equipment Powerhouse Caterpillar Faces Steeper-than-Anticipated First Quarter Setback
In a surprise blow, construction equipment vendor Caterpillar (CAT) reported a larger first-quarter sales slump than analysts projected on Wednesday. The company's revenue plummeted 10% year-on-year to $14.25 billion, falling below the predicted $14.65 billion. Although adjusted earnings per share hit the mark at $4.25, the shortfall in revenue speaks volumes.
Sales tumbled 19% in Caterpillar's Construction Industries division. Meanwhile, this metric declined 10% in its Resource Industries and Energy & Transportation units, respectively.
Two Potential Outcomes for 2025
Caterpillar presented two possible outlooks for 2025, taking into account the impact of tariffs or a tariff-less environment.
Without tariffs, the company forecasts revenue to remain relatively flat compared to 2024, which is an improvement on initial expectations of a slight decline. However, with tariffs, revenue is estimated to align with the prior expectation of a slight decline. Under this scenario, Caterpillar anticipates negative economic growth during the second half of 2025 and additional cost headwinds due to tariffs totaling $250 million to $350 million for the current quarter.
Shares dipped as markets opened, having slipped approximately 15% since the year's beginning — a fallout attributed to the trade escalations that erupted following the April 2 tariff announcement.
Just a few days ago, Caterpillar announced a leadership reshuffle, with Joe Creed set to supersede Jim Umpleby as CEO on Thursday. Umpleby, who has presided over the CEO role for eight years, will now serve as executive chairman of the board.
We've updated the article with the latest share price information.
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- Despite the challenge of tariffs looming over the industry, Caterpillar aims for revenue to remain steady in 2025, compared to 2024, without tariffs.
- With tariffs in effect, however, the company projects a slight decline in revenue, similar to the initial expectations for 2025.
- Caterpillar anticipates negative economic growth during the second half of 2025 and additional cost headwinds due to tariffs, amounting to $250 million to $350 million for the current quarter, in a tariff-laden scenario.
- The continuing trade escalations following the April 2 tariff announcement have been a significant factor in the 15% dip in Caterpillar's share prices since the beginning of the year.
- In response to this financial setback, Caterpillar has announced a leadership reshuffle, with Joe Creed set to assume the CEO position, taking over from Jim Umpleby, who has served as CEO for eight years and will now become the executive chairman of the board.
- As a key player in the finance and business sectors, the liquidity of Caterpillar's token could be greatly affected by projected trading patterns based on these developments in the industry.
