Caterpillar Inc.

First Quarter Performance: Caterpillar reported Q1 2025 sales and revenues of $14.2 billion, down 10% year-over-year (YoY). Adjusted operating profit margin was 18.3%, above expectations due to favorable manufacturing costs, despite a profit per share decrease (from $5.60 to $4.25 YoY). The decline in sales was attributed to lower sales volume and negative price realization, with machine sales to users slightly better than anticipated.

Dealer Inventory and Backlog Growth: Dealer inventories increased by approximately $100 million, which was less than expected due to strong machine sales. The backlog grew by $5 billion (17%), reaching an all-time record of $35 billion. This robust backlog indicates strong order rates across all segments, particularly in Energy & Transportation, providing optimism for future revenue streams.

Outlook for Q2 2025: Caterpillar anticipates flat sales in Q2 YoY, with growth in Energy & Transportation offset by declines in Construction and Resource Industries mainly due to negative price realization and tariffs. Tariffs are estimated to have a headwind cost impact of $250 million to $350 million in Q2, presenting a notable challenge.