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In its first quarter of 2025, Caterpillar Inc. (NYSE: CAT) reported a decline in sales and profit compared to the previous year, falling short of market expectations. This article delves into the company’s financial performance, comparing it with anticipated figures, and discusses the guidance for future quarters.
 

Caterpillar Inc. Reports Sales and Profit Decline y/y in Q1

The first quarter of 2025 proved challenging for Caterpillar Inc., as the company reported sales and revenues of $14.2 billion, a 10% decrease from the $15.8 billion recorded in the first quarter of 2024. This decline was attributed primarily to a reduction in sales volume, which accounted for a $1.1 billion drop, and unfavorable price realization amounting to $250 million.

The decrease in sales volume was largely driven by changes in dealer inventories, which saw a modest increase of $100 million in 2025, compared to a $1.4 billion increase in the same period the previous year.

Earnings per share (EPS) for the first quarter came in at $4.20, falling short of the market expectations of $4.37. The adjusted earnings per share, which excludes restructuring income and costs, was slightly higher at $4.25. Despite these figures, both earnings per share and adjusted earnings per share were significantly lower than the $5.75 and $5.60 reported in the first quarter of 2024, respectively.

The operating profit margin also saw a decline, dropping to 18.1% from 22.3% in the previous year, while the adjusted operating profit margin was 18.3%, down from 22.2%.

In terms of segment performance, all three primary segments—Construction Industries, Resource Industries, and Energy & Transportation—experienced declines in sales. Construction Industries saw the most significant drop, with sales falling by 19% to $5.184 billion. Resource Industries and Energy & Transportation also reported decreases of 10% and 2%, respectively. These declines were driven by lower sales volumes and unfavorable price realizations, compounded by unfavorable currency impacts in certain regions.
 

Caterpillar’s Guidance Reflect Caution Amid Global Uncertainities

Looking ahead, Caterpillar Inc. has provided guidance that reflects caution in the face of ongoing global economic uncertainties. The company emphasized its commitment to long-term profitable growth through its diverse portfolio and end markets. Despite the challenges faced in the first quarter, Caterpillar’s management remains optimistic about its strategic initiatives aimed at driving growth and enhancing shareholder value.

During the first quarter of 2025, Caterpillar deployed $4.3 billion in cash for share repurchases and dividends, demonstrating its strong balance sheet and commitment to returning value to shareholders. The company ended the quarter with $3.6 billion in enterprise cash, highlighting its financial strength and ability to navigate challenging market conditions.

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