Caterpillar Inc. (NYSE:CAT) reported second-quarter 2025 revenue of $16.569 billion, down 1 percent from $16.689 billion a year earlier, beating the analyst consensus of $16.17 billion.
The adjusted earnings per share of $4.72 missed the $4.90 estimate. GAAP earnings per share were $4.62, compared with $5.48 in the prior-year period.
GAAP operating profit was $2.860 billion, representing a 17.3% margin, a decrease of $622 million, or 18% YoY, compared with $3.482 billion. This was primarily due to unfavorable manufacturing costs, which the company repeatedly said “largely reflected the impact of higher tariffs.”. Adjusted operating profit was $2.916 billion, with a 17.6% margin, down from 22.4% a year ago.
Enterprise operating cash flow was $3.1 billion for the quarter. Machinery, Energy & Transportation (ME&T) free cash flow was $1.5 billion. The company ended the quarter with $5.4 billion in enterprise cash. During the period, Caterpillar repurchased $800 million of common stock and paid $700 million in dividends.
Construction Industries posted sales of $6.190 billion, down 7% from $6.683 billion a year ago. Segment profit declined 29% to $1.244 billion, and the segment margin fell to 20.1% from 26.1%.
Management attributed the margin pressure to unfavorable price realization and “unfavorable manufacturing costs largely reflected the impact of higher tariffs.”
Resource Industries reported sales of $3.087 billion, a 4% decrease year-over-year. Segment profit fell 25% to $537 million. The company again cited “unfavorable manufacturing costs largely reflected the impact of higher tariffs” as a key driver of the profit decline.
Energy & Transportation generated $7.836 billion in sales, up 7% from $7.337 billion in the prior-year quarter. Segment profit rose 4% to $1.585 billion, though the margin declined slightly to 20.2%. Higher manufacturing costs due to tariffs contributed to the margin compression.
Financial Products revenue rose 4% to $1.042 billion. Segment profit increased 9% to $248 million, driven by higher average earning assets and gains on equity securities, partially offset by increased provision for credit losses.
Geographically, North America sales declined about 2 percent to approximately $8.9 billion, while Latin America revenue fell 4 percent. In contrast, EAME (Europe, Africa, Middle East) posted a 6 percent increase in regional sales, and Asia Pacific posted flat or unchanged revenue versus the prior-year quarter.
