CATERPILLAR INC
For the period ended Jun 30, 2025. Filed Aug 6, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 6, 2025
CAT$558.63+0.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-07.
0000018230-25-000016
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-06.
0000018230-25-000040
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 221 previous paragraphs and 274 current paragraphs.
129 unchanged; 60 reworded; 70 added; 27 removed; 5 previous and 15 current paragraphs rearranged.
Tables are not compared: 15 previous and 21 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (70)
Current report
•Total sales and revenues for the second quarter of 2025 were $16.569 billion, a decrease of $120 million, or 1 percent, compared with $16.689 billion in the second quarter of 2024. In the three primary segments, sales were higher in Energy & Transportation and lower in Construction Industriesand Resource Industries.
Current report
Highlights for the six months ended June 30, 2025 include:
Current report
•Total sales and revenues were $30.818 billion for the six months ended June 30, 2025, a decrease of $1.670 billion, or 5 percent, compared with $32.488 billion for the six months ended June 30, 2024.
Current report
•Enterprise operating cash flow was $4.4 billion for the six months ended June 30, 2025.
Current report
Total sales and revenues for the second quarter of 2025 were $16.569 billion, a decrease of $120 million, or 1 percent, compared with $16.689 billion in the second quarter of 2024. The decrease was primarily due to unfavorable price realization of $414 million, partially offset by higher sales volume of $237 million and higher Financial Products' revenues of $46 million. Higher sales volume was mainly driven by higher sales of equipment to end users.
Current report
We continue to see strong orders across our three primary segments as demand remains resilient supported by infrastructure spending and growing energy needs. As a result, the backlog increased by about $2.5 billion with increases across all three primary segments.
Current report
We are optimistic about our sales and revenues expectations. Demand signals have remained healthy, including backlog growth across our three primary segments.
Current report
For 2025, we expect slightly higher sales and revenues as compared to 2024, with a stronger second half of 2025 than is typical. Services revenues are expected to be about flat for 2025 as compared to 2024.
Current report
The environment continues to be dynamic. The incremental tariffs announced in 2025 and expected to be in place on August 7 will be a headwind to profitability during the remainder of the year. While we have taken initial mitigating actions to reduce the impact, tariff and trade negotiations continue to be fluid. We will remain flexible, and we intend to implement longer-term actions once there is sufficient certainty. We are considering all options to further reduce the impact from incremental tariffs going forward.
Current report
Based on the incremental tariffs announced in 2025 and expected to be in place on August 7, we expect the incremental tariff impact for 2025 to be around $1.3 billion to $1.5 billion, net of some mitigating actions and cost controls. This assumes higher net incremental tariff impacts in both the third and fourth quarters compared to the second-quarter level. Due to the timing of recent rate changes, the impact is likely to be larger in the fourth quarter of 2025 as compared to the third quarter of 2025.
Current report
Second-Half 2025 Company Trends and Expectations
Current report
We anticipate higher machine sales volume, including growth in sales of equipment to end users, in the second half of 2025 as compared to the second half of 2024. We also continue to expect machine dealer inventory will be about flat for the full-year 2025 as compared to 2024, which implies an increase in the second half of 2025 as compared to a decrease in the second half of 2024. In Energy & Transportation, we expect higher sales in the second half of 2025 compared to the second half of 2024.
Current report
We expect unfavorable price realization in the second half of 2025 as compared to the second half of 2024, although we expect it to be less unfavorable than the first half of 2025 as compared to the first half of 2024.
Current report
In the third quarter of 2025 as compared to the third quarter of 2024, we expect moderately higher sales and revenues, primarily driven by higher sales volume across all three primary segments. In Construction Industries, we expect higher sales in the third quarter of 2025 as compared to the third quarter of 2024, primarily driven by higher sales volume, partially offset by unfavorable price realization. We expect higher sales volume to be mainly driven by higher sales of equipment to end users. Though the year-over-year price comparison begins to ease in the third quarter of 2025, we expect our sales merchandising programs will continue to support higher sales of equipment to end users. The unfavorable impact of price realization in the third quarter of 2025 as compared to the third quarter of 2024 is expected to be about half of the impact in the second quarter of 2025 when compared to the second quarter of 2024. In Resource Industries, in the third quarter of 2025, we expect slightly higher sales as compared to the third quarter of 2024, primarily due to higher sales volume, partially offset by unfavorable price realization. The unfavorable impact of price realization in the third quarter of 2025 as compared to the third quarter of 2024 is expected to be similar to the impact in the second quarter of 2025 as compared to the second quarter of 2024. In Energy & Transportation, in the third quarter of 2025, we anticipate higher sales as compared to the third quarter of 2024, primarily driven by continued strength in Power Generation. We also expect higher sales in Oil and Gas, driven by turbines and turbine-related services. Price realization is expected to remain favorable.
Current report
In the third quarter of 2025 as compared to the third quarter of 2024, excluding the net impact from incremental tariffs, we expect the profit impact of higher sales volume to be about offset by unfavorable price realization and higher selling, general and administrative (SG&A) and research and development (R&D) expenses. In the third quarter of 2025, we expect a net incremental tariff impact of about $400 to $500 million.
Current report
Total sales and revenues for the second quarter of 2025 were $16.569 billion, a decrease of $120 million, or 1 percent, compared with $16.689 billion in the second quarter of 2024. The decrease was primarily due to unfavorable price realization of $414 million, partially offset by higher sales volume of $237 million and higher Financial Products' revenues of $46 million. Higher sales volume was mainly driven by higher sales of equipment to end users.
Current report
In the three primary segments, sales were higher in Energy & Transportation and lower in Construction Industries and Resource Industries.
Current report
North America sales decreased 3 percent primarily due to unfavorable price realization, partially offset by higher sales volume. The increase in sales volume was mainly driven by higher sales of equipment to end users, partially offset by the impact from changes indealer inventories. Dealer inventory decreased during the second quarter of 2025, compared with an increase during the second quarter of 2024.
Current report
EAME sales increased 6 percent primarily due to higher sales volume. Higher sales volume was primarily driven by the impact from changes in dealer inventories. Dealer inventory increased during the second quarter of 2025, compared with a decrease during the second quarter of 2024.
Current report
Asia/Pacific sales decreased 2 percent due to unfavorable price realization and unfavorable currency impacts primarily related to the Australian dollar, partially offset by higher sales volume. Higher sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory increased during the second quarter of 2025, compared with a decrease during the second quarter of 2024.
Current report
Operating profit margin was 17.3 percent for the second quarter of 2025, compared with 20.9 percent for the second quarter of 2024.
Current report
•The effective tax rate for the second quarter of 2025 was 23.0 percent compared to 23.9 percent for the second quarter of 2024. Excluding discrete items, the second-quarter 2025 estimated annual effective tax rate was 23.0 percent compared with 22.5 percent for the second quarter of 2024. The estimated annual effective tax rate in the second quarter of 2024 excluded the impact of second-quarter losses of $228 million for the divestiture of two non-U.S. entities with no related tax benefit.
Current report
Construction Industries’ total sales were $6.190 billion in the second quarter of 2025, a decrease of $493 million, or 7 percent, compared with $6.683 billion in the second quarter of 2024. The decrease was primarily due to unfavorable price realization. Sales volume was also lower, primarily driven by the impact from changes in dealer inventories. Dealer inventory decreased during the second quarter of 2025, while remaining about flat during the second quarter of 2024.
Current report
•Sales decreased in Latin America primarily due to lower sales volume and unfavorable currency impacts primarily related to the Brazilian real. Lower sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory decreased during the second quarter of 2025, compared with an increase during the second quarter of 2024.
Current report
•In EAME, sales increased due to higher sales volume and favorable currency impacts primarily related to the euro, partially offset by unfavorable price realization. Higher sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory increased during the second quarter of 2025, compared with a decrease during the second quarter of 2024.
Current report
•Sales increased in Asia/Pacific due to higher sales volume, partially offset by unfavorable price realization. Higher sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory increased during the second quarter of 2025, compared with a decrease during the second quarter of 2024.
Current report
Construction Industries’ segment profit was $1.244 billion in the second quarter of 2025, a decrease of $497 million, or 29 percent, compared with $1.741 billion in the second quarter of 2024. The decrease was mainly due to unfavorable price realization. In addition, tariffs were also higher.
Current report
Construction Industries’ segment profit as a percent of total sales was 20.1 percent in the second quarter of 2025, compared with 26.1 percent in the second quarter of 2024.
Current report
Resource Industries’ total sales were $3.087 billion in the second quarter of 2025, a decrease of $119 million, or 4 percent, compared with $3.206 billion in the second quarter of 2024. The decrease was primarily due to unfavorable price realization.
Current report
Resource Industries’ segment profit was $537 million in the second quarter of 2025, a decrease of $181 million, or 25 percent, compared with $718 million in the second quarter of 2024. The decrease was mainly due to unfavorable price realization of $94 million, unfavorable manufacturing costs of $44 million and the profit impact of lower sales volume of $31 million, including an unfavorable mix of products. Unfavorable manufacturing costs largely reflected the impact of higher tariffs.
Current report
Resource Industries’ segment profit as a percent of total sales was 17.4 percent in the second quarter of 2025, compared with 22.4 percent in the second quarter of 2024.
Current report
Energy & Transportation’s total sales were $7.836 billion in the second quarter of 2025, an increase of $499 million, or 7 percent, compared with $7.337 billion in the second quarter of 2024. The increase was due to higher sales volume of $326 million and favorable price realization of $139 million.
Current report
•Oil and Gas – Sales increased for turbines and turbine-related services. The increase was partially offset by lower sales of reciprocating engines, primarily engines used in gas compression applications.
Current report
•Industrial – Sales increased in EAME, partially offset by decreased sales in North America and Latin America.
Current report
Energy & Transportation’s segment profit was $1.585 billion in the second quarter of 2025, an increase of $60 million, or 4 percent, compared with $1.525 billion in the second quarter of 2024. The increase was primarily due to favorable price realization of $139 million and the profit impact of higher sales volume of $63 million, partially offset by unfavorable manufacturing costs of $154 million. Unfavorable manufacturing costs largely reflected the impact of higher tariffs.
Current report
Financial Products’ segment profit was $248 million in the second quarter of 2025, an increase of $21 million, or 9 percent, compared with $227 million in the second quarter of 2024. The increase was mainly due to a favorable impact from equity securities of $28 million and a favorable impact from higher average earning assets of $20 million, partially offset by higher provision for credit losses at Cat Financial of $13 million and an unfavorable impact from lower net yield on average earning assets of $10 million.
Current report
SIX MONTHS ENDED JUNE 30, 2025 COMPARED WITH SIX MONTHS ENDED JUNE 30, 2024
Current report
CONSOLIDATED SALES AND REVENUES
Current report
The chart above graphically illustrates reasons for the change in consolidated sales and revenues between the six months ended June 30, 2024 (at left) and the six months ended June 30, 2025 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company’s board of directors and employees.
Current report
Total sales and revenues were $30.818 billion for the six months ended June 30, 2025, a decrease of $1.670 billion, or 5 percent, compared with $32.488 billion for the six months ended June 30, 2024. The decrease was primarily due to lower sales volume of $873 million and unfavorable price realization of $664 million. The decrease in sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory increased less during the six months ended June 30, 2025, than during the six months ended June 30, 2024.
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Removed paragraphs (27)
Previous report
•Total sales and revenues for the first quarter of 2025 were $14.249 billion, a decrease of $1.550 billion, or 10 percent, compared with $15.799 billion in the first quarter of 2024. Sales were lower across the three primary segments.
Previous report
Total sales and revenues for the first quarter of 2025 were $14.249 billion, a decrease of $1.550 billion, or 10 percent, compared with $15.799 billion in the first quarter of 2024. The decrease was primarily due to lower sales volume and unfavorable price realization. Lower sales volume was mainly driven by the impact from changes indealer inventories.
Previous report
Our results continue to reflect the benefit of the diversity of our end markets.
Previous report
We are closely monitoring the evolving economic conditions. Due to the tariff announcements and increasing economic uncertainty, we have evaluated a variety of scenarios to estimate the potential impact of tariffs on our results for the remainder of the year.
Previous report
Demand signals were stronger than we expected in the first quarter of 2025, including backlog growth across our three primary segments and stronger than expected sales of equipment to end users in Construction Industries and Resource Industries. These indicators boost our confidence in the resilience of our sales and revenues this year.
Previous report
For the full-year 2025, in a pre-tariff scenario, which does not include any impact from tariffs, we expect sales and revenues to be about flat compared to 2024.
Previous report
In our alternative scenario, which assumes negative economic growth in the second half of 2025, we expect full-year sales and revenues to only be down slightly in 2025 as compared to 2024. This expectation is a reflection of the diversity of our end markets and the strength of our record backlog, especially for large reciprocating engines and for turbines and turbine-related services.
Previous report
We expect the year over year impact of unfavorable price realization to be greater in the first and second quarters of 2025 and expect it to moderate in the second half of 2025. In addition, we also do not expect a significant decrease in machine dealer inventory as we saw in the fourth quarter of 2024, and we still expect dealers to hold inventories about flat for the full year.
Previous report
We have assessed potential cost impacts from the current tariffs which have been announced and implemented for the full-year 2025 before any additional mitigation actions; however, given the uncertainty of what the tariff rates could be and the timing of any additional mitigation actions, it is not possible to derive an accurate estimate of the net full-year 2025 impact of tariffs.
Previous report
In the second quarter of 2025, we expect sales and revenues to be similar to the second quarter of 2024. Sales growth in Energy & Transportation is expected to be offset by lower sales in Construction Industries and Resource Industries, primarily driven by unfavorable price realization. Machine sales volume is expected to be about flat.
Previous report
In the second quarter of 2025 as compared to the second quarter of 2024, we anticipate lower sales in Construction Industries primarily due to unfavorable price realization, partially offset by slightly higher sales volume. In Resource Industries, we expect lower sales primarily due to unfavorable price realization and slightly lower sales volume. In Energy & Transportation, we anticipate higher sales in the second quarter of 2025 as compared to the second quarter of 2024, primarily driven by strength in Power Generation and Oil and Gas. The strength in Oil and Gas is driven by turbines and turbine-related services. We expect favorable price realization for Energy & Transportation in the second quarter of 2025.
Previous report
In the second quarter of 2025 as compared to the second quarter of 2024, we expect unfavorable price realization, unfavorable manufacturing costs and higher selling, general and administrative (SG&A) and research and development (R&D) expenses. We anticipate $250 million to $350 million of estimated cost in the second quarter of 2025 related to the tariffs which have been announced and implemented in 2025. This estimate is net of initial mitigation efforts and cost controls which represent limited, short-term actions that we were able to implement quickly.
Previous report
Total sales and revenues for the first quarter of 2025 were $14.249 billion, a decrease of $1.550 billion, or 10 percent, compared with $15.799 billion in the first quarter of 2024. The decrease was primarily due to lower sales volume of $1.1 billion and unfavorable price realization of $250 million. Lower sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory increased by $100 million during the first quarter of 2025, compared with an increase of $1.4 billion during the first quarter of 2024.
Previous report
Sales were lower across the three primary segments.
Previous report
Operating profit for the first quarter of 2025 was $2.579 billion, a decrease of $940 million, or 27 percent, compared with $3.519 billion in the first quarter of 2024. The decrease was mainly due to the profit impact of lower sales volume of $652 million and unfavorable price realization of $250 million.
Previous report
Construction Industries’ total sales were $5.184 billion in the first quarter of 2025, a decrease of $1.240 billion, or 19 percent, compared with $6.424 billion in the first quarter of 2024. The decrease was primarily due to lower sales volume of $820 million and unfavorable price realization of $355 million. The decrease in sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory decreased slightly during the first quarter of 2025, compared with an increase during the first quarter of 2024.
Previous report
•Sales decreased in Asia/Pacific due to lower sales volume, unfavorable price realization and unfavorable currency impacts primarily related to the Japanese yen. Lower sales volume was mainly driven by lower sales of equipment to end users.
Previous report
Construction Industries’ segment profit was $1.024 billion in the first quarter of 2025, a decrease of $740 million, or 42 percent, compared with $1.764 billion in the first quarter of 2024. The decrease was mainly due to the profit impact of lower sales volume of $371 million and unfavorable price realization of $355 million.
Previous report
Construction Industries’ segment profit as a percentage of total sales was 19.8 percent in the first quarter of 2025, compared with 27.5 percent in the first quarter of 2024.
Previous report
Resource Industries’ total sales were $2.884 billion in the first quarter of 2025, a decrease of $309 million, or 10 percent, compared with $3.193 billion in the first quarter of 2024. The decrease was primarily due to lower sales volume of $179 million, unfavorable price realization of $50 million and unfavorable currency impacts of $46 million, primarily related to the Australian dollar. The decrease in sales volume was mainly driven by lower sales of equipment to end users.
Previous report
Resource Industries’ segment profit as a percentage of total sales was 20.8 percent in the first quarter of 2025, compared with 22.9 percent in the first quarter of 2024.
Previous report
Energy & Transportation’s total sales were $6.568 billion in the first quarter of 2025, a decrease of $113 million, or 2 percent, compared with $6.681 billion in the first quarter of 2024. The decrease was primarily due to lower sales volume of $175 million, unfavorable currency impacts of $69 million primarily related to the euro, and lower inter-segment sales of $24 million, partially offset by favorable price realization of $155 million.
Previous report
•Industrial – Sales decreased primarily in North America and Asia/Pacific, partially offset by increased sales in EAME.
Previous report
Supplemental Data for Results of Operations
Previous report
1 Elimination of Financial Products’ revenues earned from ME&T.
Previous report
Supplemental Data for Results of Operations
Previous report
1 Elimination of Financial Products’ revenues earned from ME&T.
Reworded paragraphs (60)
Previous wording
Highlights for the first quarter of 2025 include:
Current wording
Highlights for the second quarter of 2025 include:
Previous wording
•Operating profit margin was 18.1 percent for the first quarter of 2025, compared with 22.3 percent for the first quarter of 2024. Adjusted operating profit marginwas 18.3 percent for the first quarter of 2025, compared with 22.2 percent for the first quarter of 2024.
Current wording
•Operating profit margin was 17.3 percent for the second quarter of 2025, compared with 20.9 percent for the second quarter of 2024. Adjusted operating profit margin was 17.6 percent for the second quarter of 2025, compared with 22.4 percent for the second quarter of 2024.
Previous wording
•First-quarter 2025 profit per share was $4.20, and excluding the items in the table below, adjusted profit per share was $4.25. First-quarter 2024 profit per share was $5.75, and excluding the items in the table below, adjusted profit per share was $5.60.
Current wording
•Second-quarter 2025 profit per share was $4.62, and excluding the items in the table below, adjusted profit per share was $4.72. Second-quarter 2024 profit per share was $5.48, and excluding the items in the table below, adjusted profit per share was $5.99.
Previous wording
•Caterpillar ended the first quarter of 2025 with $3.6 billion of enterprise cash.
Current wording
•Caterpillar ended the second quarter of 2025 with $5.4 billion of enterprise cash.
Previous wording
Operating profit margin was 18.1 percent for the first quarter of 2025, compared with 22.3 percent for the first quarter of 2024.
Current wording
•Operating profit margin was 17.6 percent for the six months ended June 30, 2025, compared with 21.5 percent for the six months ended June 30, 2024. Adjusted operating profit margin was 17.9 percent for the six months ended June 30, 2025, compared with 22.3 percent for the six months ended June 30, 2024.
Previous wording
In order for our results to be more meaningful to our readers, we have separately quantified the impact of significant items.
Current wording
In order for our results to be more meaningful to our readers, we have separately quantified the impact of several significant items.
Previous wording
A detailed reconciliation of GAAP to non-GAAP financial measures is included on pages 57-59.
Current wording
A detailed reconciliation of GAAP to non-GAAP financial measures is included on pages 67-69.
Previous wording
First-quarter 2025 profit per share was $4.20, compared with $5.75 profit per share in the first quarter of 2024. In the first quarter of 2025 and 2024, profit per share included restructuring income/costs. Profit for the first quarter of 2025 was $2.003 billion, a decrease of $853 million, or 30 percent, compared with $2.856 billion for the first quarter of 2024. The decrease was mainly due to the profit impact of lower sales volume and unfavorable price realization.
Current wording
Second-quarter 2025 profit per share was $4.62, compared with $5.48 profit per share in the second quarter of 2024. In the second quarter of 2025 and 2024, profit per share included restructuring costs. Profit for the second quarter of 2025 was $2.179 billion, a decrease of $502 million, or 19 percent, compared with $2.681 billion for the second quarter of 2024. The decrease was mainly due to unfavorable manufacturing costs. Unfavorable manufacturing costs largely reflected the impact of higher tariffs.
Previous wording
In Construction Industries, we are encouraged by another quarter of better-than-expected sales of equipment to end users and strong order rates across many of our regions as customers are responding to the attractiveness of our sales merchandising programs. Construction spend in North America remains at healthy levels, and infrastructure projects funded by the Infrastructure Investment and Jobs Act (IIJA) continue to be awarded. In Asia Pacific, outside of China, economic conditions continue to be soft. China has shown positive momentum in the excavator industry above 10-tons, but from a very low level of activity. In EAME, weak economic conditions in Europe remain, while conditions are supportive of investment in Africa and the Middle East. Construction activity in Latin America is expected to moderately decline in 2025 as compared to 2024.
Current wording
In Construction Industries, we are encouraged by another quarter of higher sales of equipment to end users, strong order rates across many of our regions, and backlog growth. Customers continue to be responsive to the attractive rates we are offering through Cat Financial. As a result, we anticipate growth in sales of equipment to end users in 2025 despite softness in the global industry. In North America, overall construction spending remains at healthy levels and infrastructure projects funded by the Infrastructure Investment and Jobs Act (IIJA) continue to be awarded. We now expect growth for sales of equipment to end users in North America in 2025. Dealer rental revenues are also expected to grow and dealer rental fleet loading is expected to increase in the second half of 2025. In Asia Pacific, we anticipate growth in sales of equipment to end users in 2025. China is showing positive momentum, and we expect growth in the above 10-ton excavator industry, but from a very low level of activity. In Asia Pacific, outside of China, we expect economic conditions to be soft. In EAME, we expect moderate growth in sales of equipment to end users in 2025, driven by healthy construction activity in Africa and the Middle East and improving economic conditions in Europe. Despite weaker construction activity in Latin America, we expect growth in sales of equipment to end users in 2025.
Previous wording
In Resource Industries, we are starting the year with strong order rates and backlog growth, particularly for large mining trucks. Rebuild activity is expected to remain healthy. Although most key commodities remain above investment thresholds, customers continue to display capital discipline. Customer product utilization remains high, the age of the fleet remains elevated, and we continue to see growing customer acceptance of our autonomous solutions. We believe the evolving energy landscape will support increased commodity demand over time, providing further opportunities for long-term profitable growth.
Current wording
In Resource Industries, we currently anticipate lower sales of equipment to end users for 2025 compared to 2024, as customers continue to display capital discipline. However, we see positive momentum with strong order rates and backlog growth, particularly for large mining and articulated trucks. Although most key commodities remain above investment thresholds, declining coal prices have caused an increase in the number of parked trucks. As a result, we expect slightly lower rebuild activity throughout the second half of 2025. Overall, customer product utilization remains high, and the age of the fleet remains elevated. We also continue to see growing demand and customer acceptance of our autonomous solutions. We believe the evolving energy landscape will support increased commodity demand over time providing further opportunities for long-term profitable growth.
Previous wording
In Energy & Transportation, the growth in backlog was driven by robust order activity in both Oil and Gas and Power Generation. Demand remains strong in Power Generation for both reciprocating engines and turbines and turbine-related services in 2025. The strength of our backlog gives us confidence in our long-term outlook. For Oil and Gas reciprocating engines and services, we expect continuing softness in well servicing due to ongoing capital discipline by our customers, industry consolidation and efficiency improvements in our customers’ operations. Also within Oil and Gas reciprocating engines and services, we see positive momentum in gas compression. For turbines and turbine-related services used in Oil and Gas applications, backlog remains strong, and we continue to see healthy orders. Demand for products in Industrial applications is expected to remain at a relatively low level. Transportation is expected to remain stable.
Current wording
In Energy & Transportation, the backlog growth was driven by robust order activity in Power Generation, Oil and Gas, and Transportation. For Power Generation, we expect growth in 2025 as demand remains strong for both prime and backup power applications, driven by increasing energy demands to support data center growth related to cloud computing and generative artificial intelligence (AI). In Oil and Gas, we expect moderate growth in 2025. For Oil and Gas reciprocating engines and services, we continue to expect softness in well servicing due to ongoing capital discipline by our customers, industry consolidation and efficiency improvements in our customers’ operations. Also within Oil and Gas, we do see positive momentum in demand for reciprocating engines used in gas compression applications. For turbines and turbine-related services used in Oil and Gas applications, backlog remains strong, and we see healthy order and inquiry activity. Demand for products in Industrial applications is expected to improve from previous low levels. Transportation is expected to remain stable.
Previous wording
In 2025, we continue to expect restructuring costs of approximately $150 million to $200 million and expect capital expenditures of about $2.5 billion. We anticipate the annual effective tax rate, excluding discrete items, to be 23.0 percent in 2025.
Current wording
In 2025, we expect restructuring costs of approximately $300 to $350 million and capital expenditures of around $2.5 billion. We are evaluating the impact from recently enacted U.S. legislation and do not expect a material impact on the estimated annual effective tax rate of 23.0 percent in 2025.
Previous wording
Second-Quarter 2025 Company Trends and Expectations
Current wording
Third-Quarter 2025 Company Trends and Expectations
Previous wording
In Construction Industries, we expect unfavorable price realization in the second quarter of 2025 as compared to the second quarter of 2024. We expect about 50 percent of the $250 million to $350 million of estimated cost related to tariffs to be incurred in Construction Industries. In Resource Industries, we expect unfavorable price realization and higher SG&A/R&D expenses in the second quarter of 2025 as compared to the second quarter of 2024. We expect about 25 percent of the $250 million to $350 million of estimated cost related to tariffs to be incurred in Resource Industries. In Energy & Transportation, we expect the profit impact of higher sales volume and favorable price realization to be partially offset by unfavorable manufacturing costs and higher SG&A/R&D expenses. We expect about 25 percent of the $250 million to $350 million of estimated cost related to tariffs to be incurred in Energy & Transportation.
Current wording
In the third quarter of 2025 as compared to the third quarter of 2024, in Construction Industries, excluding the net impact from incremental tariffs, we expect the profit impact of higher sales volume will be about offset by unfavorable price realization. We expect about 55 percent of the net incremental tariff impact will be incurred in Construction Industries. In Resource Industries, excluding the net impact from incremental tariffs, we expect unfavorable price realization and higher SG&A/R&D expenses. We expect about 20 percent of the net incremental tariff impact will be incurred in Resource Industries. In Energy & Transportation, excluding the net impact from incremental tariffs, we expect profit impact of higher sales volume and favorable price realization, partially offset by higher manufacturing costs. We expect about 25 percent of the net incremental tariff impact will be incurred in Energy & Transportation.
Previous wording
•Glossary of terms is included on pages 52-54; first occurrence of terms shown in bold italics.
Current wording
•Glossary of terms is included on pages 61-63; first occurrence of terms shown in bold italics.
Previous wording
•Information on non-GAAP financial measures is included on pages 57-59.
Current wording
•Information on non-GAAP financial measures is included on pages 67-69.
Previous wording
The chart above graphically illustrates reasons for the change in consolidated sales and revenues between the first quarter of 2024 (at left) and the first quarter of 2025 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company’s board of directors and employees.
Current wording
The chart above graphically illustrates reasons for the change in consolidated sales and revenues between the second quarter of 2024 (at left) and the second quarter of 2025 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company’s board of directors and employees.
Previous wording
North America sales decreased 11 percent primarily due to lower sales volume. The decrease in sales volume was primarily driven by the impact from changes in dealer inventories. Dealer inventory increased less during the first quarter of 2025 than during the first quarter of 2024.
Current wording
Sales decreased 4 percent in Latin America mainly due to lower sales volume. The decrease in sales volume was primarily driven by the impact from changes in dealer inventories. Dealer inventory increased less during the second quarter of 2025 than during the second quarter of 2024.
Previous wording
Total dealer inventory increased $100 million during the first quarter of 2025, compared with an increase of $1.4 billion during the first quarter of 2024. Machine dealer inventory was about flat during the first quarter of 2025, compared with an increase of $1.1 billion during the first quarter of 2024. Dealers are independent, and the reasons for changes in their inventory levels vary, including their expectations of future demand and product delivery times. Dealers’ demand expectations take into account seasonal changes, macroeconomic conditions, machine rentals and other factors. Delivery times can vary based on availability of product from Caterpillar factories and product distribution centers.
Current wording
Total dealer inventory increased $100 million during the second quarter of 2025, compared with a decrease of $200 million during the second quarter of 2024. In the second quarter of 2025 and 2024, machine dealer inventory decreased $400 million. Dealers are independent, and the reasons for changes in their inventory levels vary, including their expectations of future demand and product delivery times. Dealers’ demand expectations take into account seasonal changes, macroeconomic conditions, machine rentals and other factors. Delivery times can vary based on availability of product from Caterpillar factories and product distribution centers.
Previous wording
1 Includes revenues from Machinery, Energy & Transportation of $163 million and $177 million in the first quarter of 2025 and 2024, respectively.
Current wording
1 Includes revenues from Machinery, Energy & Transportation of $172 million and $180 million in thesecond quarter of 2025 and 2024, respectively.
Previous wording
The chart above graphically illustrates reasons for the change in consolidated operating profit between the first quarter of 2024 (at left) and the first quarter of 2025 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company’s board of directors and employees. The bar titled Other includes consolidating adjustments and Machinery, Energy & Transportation's other operating (income) expenses.
Current wording
The chart above graphically illustrates reasons for the change in consolidated operating profit between the second quarter of 2024 (at left) and the second quarter of 2025 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company’s board of directors and employees. The bar titled Other includes consolidating adjustments and Machinery, Energy & Transportation other operating (income) expenses.
Previous wording
Resource Industries’ segment profit was $599 million in the first quarter of 2025, a decrease of $131 million, or 18 percent, compared with $730 million in the first quarter of 2024. The decrease was mainly due to the profit impact of lower sales volume.
Current wording
Operating profit for the second quarter of 2025 was $2.860 billion, a decrease of $622 million, or 18 percent, compared with $3.482 billion in the second quarter of 2024. The decrease was mainly due to unfavorable manufacturing costs. Unfavorable manufacturing costs largely reflected the impacts of higher tariffs.
Previous wording
▪Interest expense excluding Financial Products in the first quarter of 2025 was $116 million, compared with $143 million in the first quarter of 2024. The decrease was due to lower average debt outstanding and lower average borrowing rates.
Current wording
•Interest expense excluding Financial Products in the second quarter of 2025 was $126 million, compared with $137 million in the second quarter of 2024. The decrease was due to lower average debt outstanding and lower average borrowing rates.
Previous wording
▪Other income (expense) in the first quarter of 2025 was income of $107 million, compared with income of $156 million in the first quarter of 2024. The change was primarily driven by unfavorable foreign currency impacts.
Current wording
•Other income (expense) in the second quarter of 2025 was income of $84 million, compared with income of $155 million in the second quarter of 2024. The change was primarily driven by unfavorable foreign currency impacts, partially offset by favorable impacts from total return swap contracts.
Previous wording
Please see a reconciliation of GAAP to non-GAAP financial measures on pages 57-59.
Current wording
Please see a reconciliation of GAAP to non-GAAP financial measures on pages 67-69.
Previous wording
•In North America, sales decreased due to lower sales volume and unfavorable price realization. Lower sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory decreased during the first quarter of 2025, compared with an increase during the first quarter of 2024.
Current wording
•In North America, sales decreased due to unfavorable price realization and lower sales volume. Lower sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory decreased during the second quarter of 2025, compared with an increase during the second quarter of 2024.
Previous wording
Energy & Transportation’s segment profit as a percentage of total sales was 20.0 percent in the first quarter of 2025, compared with 19.5 percent in the first quarter of 2024.
Current wording
Energy & Transportation’s segment profit as a percent of total sales was 20.2 percent in the second quarter of 2025, compared with 20.8 percent in the second quarter of 2024.
Previous wording
Financial Products’ segment revenues were $1.007 billion in the first quarter of 2025, an increase of $16 million, or 2 percent, compared with $991 million in the first quarter of 2024. The increase was primarily due to a favorable impact from higher average earning assets of $28 million driven by North America, partially offset by an unfavorable impact from lower average financing rates of $15 million primarily in North America.
Current wording
Financial Products’ segment revenues were $1.042 billion in the second quarter of 2025, an increase of $38 million, or 4 percent, compared with $1.004 billion in the second quarter of 2024. The increase was primarily due to a favorable impact from higher average earning assets of $49 million driven by North America and higher revenues from Insurance Services of $5 million, partially offset by an unfavorable impact from lower average financing rates of $20 million mainly in North America.
Previous wording
At the end of the first quarter of 2025, past dues at Cat Financial were 1.58 percent, compared with 1.78 percent at the end of the first quarter of 2024. Write-offs, net of recoveries, were $20 million for the first quarter of 2025, compared with $55 million for the first quarter of 2024. As of March 31, 2025, Cat Financial's allowance for credit losses totaled $282 million, or 0.95 percent of finance receivables, compared with $267 million, or 0.91 percent of finance receivables at December 31, 2024.
Current wording
At the end of the second quarter of 2025, past dues at Cat Financial were 1.62 percent, compared with 1.74 percent at the end of the second quarter of 2024. Write-offs, net of recoveries, were $18 million for both the second quarter of 2025 and the second quarter of 2024. As of June 30, 2025, Cat Financial's allowance for credit losses totaled $290 million, or 0.94 percent of finance receivables, compared with $282 million, or 0.95 percent of finance receivables at March 31, 2025. The allowance for credit losses at year-end 2024 was $267 million, or 0.91 percent of finance receivables.
Previous wording
Expense for corporate items and eliminations was $415 million in the first quarter of 2025, a decrease of $25 million from the first quarter of 2024, driven by a favorable change in fair value adjustments related to deferred compensation plans and decreased expenses due to timing differences, partially offset by unfavorable impacts of segment reporting methodology differences, unfavorable restructuring income/costs and higher corporate costs.
Current wording
Expense for corporate items and eliminations was $602 million in the second quarter of 2025, an increase of $15 million from the second quarter of 2024. Lower restructuring costs, primarily due to the absence of the divestiture of two non-U.S. entities in 2024, and lower corporate costs, were more than offset by increased expenses due to timing differences, an unfavorable change in fair value adjustments related to deferred compensation plans and unfavorable impacts of segment reporting methodology differences.
Previous wording
Sales decreased 3 percent in Latin America mainly due to unfavorable currency impacts primarily related to the Brazilian real, partially offset by higher sales volume. The increase in sales volume was primarily driven by higher sales of equipment to end users.
Current wording
Sales decreased 3 percent in Latin America mainly due to unfavorable currency impacts primarily related to the Brazilian real.
Previous wording
EAME sales decreased 13 percent primarily due to lower sales volume and unfavorable price realization. The decrease in sales volume was primarily driven by the impact from changes in dealer inventories. Dealer inventory decreased during the first quarter of 2025, compared with an increase during the first quarter of 2024.
Current wording
EAME sales decreased 3 percent primarily due to unfavorable price realization.
Previous wording
Asia/Pacific sales decreased 12 percent mainly due to lower sales volume and unfavorable currency impacts primarily related to the Australian dollar. The decrease in sales volume was primarily driven by lower sales of equipment to end users.
Current wording
Asia/Pacific sales decreased 7 percent due to lower sales volume, unfavorable price realization and unfavorable currency impacts primarily related to the Australian dollar. The decrease in sales volume was mainly due to lower sales of equipment to end users.
Previous wording
▪The effective tax rate for the first quarter of 2025 was 22.3 percent compared to 19.5 percent for the first quarter of 2024. Excluding the discrete items discussed below, the first-quarter 2025 estimated annual effective tax rate was 23.0 percent compared with 22.5 percent for the first quarter of 2024.
Current wording
•The effective tax rate for the six months ended June 30, 2025 was 22.6 percent compared to 21.7 percent for the six months ended June 30, 2024. Excluding the discrete items discussed below, the estimated annual effective tax rate for the six months ended June 30, 2025 was 23.0 percent compared with 22.5 percent for the six months ended June 30, 2024.
Previous wording
A discrete tax benefit of $17 million was recorded in the first quarter of 2025, compared with a $38 million benefit in the first quarter of 2024, for the settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S. GAAP compensation expense. In addition, the estimated annual effective tax rate in the first quarter of 2024 excluded the impact of nontaxable gains of $64 million for the divestiture of a non-U.S. mining entity along with a related tax benefit of $54 million.
Current wording
A discrete tax benefit of $18 million was recorded in the six months ended June 30, 2025, for the settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S. GAAP compensation expense, compared with $42 million for the six months ended June 30, 2024. In addition, the 2024 estimated annual effective tax rate excluded the impact of year-to-date losses of $164 million for the divestitures of certain non-U.S. entities with a related tax benefit of $54 million.
Previous wording
•Oil and Gas – Sales decreased in reciprocating engines used in gas compression and well servicing applications. Sales also decreased for turbines and turbine-related services.
Current wording
•Oil and Gas – Sales decreased in reciprocating engines, primarily engines used in gas compression applications.
Previous wording
Energy & Transportation’s segment profit was $1.314 billion in the first quarter of 2025, an increase of $13 million, or 1 percent, compared with $1.301 billion in the first quarter of 2024. The increase was primarily due to favorable price realization of $155 million, mostly offset by the profit impact of lower sales volume of $114 million and unfavorable manufacturing costs of $40 million. Unfavorable manufacturing costs largely reflected increased period manufacturing costs.
Current wording
Energy & Transportation’s profit was $2.899 billion for the six months ended June 30, 2025, an increase of $73 million, or 3 percent, compared with $2.826 billion for the six months ended June 30, 2024. The increase was mainly due to favorable price realization of $294 million, partially offset by unfavorable manufacturing costs of $194 million. Unfavorable manufacturing costs largely reflected increased period manufacturing costs.
Previous wording
Financial Products’ segment profit was $215 million in the first quarter of 2025, a decrease of $78 million, or 27 percent, compared with $293 million in the first quarter of 2024. The decrease was mainly due to the absence of an insurance settlement of $33 million in the first quarter of 2024, higher provision for credit losses at Cat Financial of $22 million, an unfavorable impact from lower net yield on average earning assets of $14 million and an unfavorable impact from equity securities of $14 million.
Current wording
Financial Products’ segment profit was $463 million for the six months ended June 30, 2025, a decrease of $57 million, or 11 percent, compared with $520 million for the six months ended June 30, 2024. The decrease was mainly due to higher provision for credit losses at Cat Financial of $35 million, the absence of an insurance settlement of $33 million in the first quarter of 2024 and an unfavorable impact from lower net yield on average earning assets of $24 million, partially offset by a favorable impact from higher average earning assets of $32 million.
Previous wording
In 2025, we expect to incur about $150 million to $200 million of restructuring costs. We expect that prior restructuring actions will result in an incremental benefit to operating costs, primarily Cost of goods sold and SG&A expenses, of about $30 million in 2025 compared with 2024.
Current wording
In 2025, we expect to incur about $300 million to $350 million of restructuring costs. We expect that prior restructuring actions will result in an incremental benefit to operating costs, primarily Cost of goods sold and SG&A expenses, of about $29 million in 2025 compared with 2024.
Previous wording
We generate significant capital resources from operating activities, which are the primary source of funding for our ME&T operations. Funding for these businesses is also available from commercial paper and long-term debt issuances. Financial Products’ operations are funded primarily from commercial paper, term debt issuances and collections from its existing portfolio. On a consolidated basis, we had positive operating cash flow in the first three months of 2025 and ended the first quarter with $3.562 billion of cash, a decrease of $3.327 billion from year-end 2024. In addition, ME&T invests in available-for-sale debt securities and bank time deposits that are considered highly liquid and are available for current operations. These ME&T securities were $1.215 billion as of March 31, 2025 and are included in Prepaid expenses and other current assets and Other assets in the Consolidated Statement of Financial Position. We intend to maintain a strong cash and liquidity position.
Current wording
We generate significant capital resources from operating activities, which are the primary source of funding for our ME&T operations. Funding for these businesses is also available from commercial paper and long-term debt issuances. Financial Products’ operations are funded primarily from commercial paper, term debt issuances and collections from its existing portfolio. On a consolidated basis, we had positive operating cash flow in the first six months of 2025 and ended the second quarter with $5.442 billion of cash, a decrease of $1.447 billion from year-end 2024. In addition, ME&T invests in available-for-sale debt securities and bank time deposits that are considered highly liquid and are available for current operations. These ME&T securities were $1.221 billion as of June 30, 2025 and are included in Prepaid expenses and other current assets and Other assets in the Consolidated Statement of Financial Position. We intend to maintain a strong cash and liquidity position.
Showing the first 40 of 60 pairs. Open the source sections for the rest.
Rearranged current paragraphs (15)
Current report — wording carried from elsewhere
•Profit per share for the six months ended June 30, 2025, was $8.82, and excluding the items in the table below, adjusted profit per share was $8.97. Profit per share for the six months ended June 30, 2024, was $11.23, and excluding the items in the table below, adjusted profit per share was $11.59.
Current report — wording carried from elsewhere
Dealer inventory increased about $200 million during the six months ended June 30, 2025, compared with an increase of about $1.2 billion during the six months ended June 30, 2024. Machine dealer inventory decreased $300 million during the six months ended June 30, 2025, compared with an increase of $700 million during the six months ended June 30, 2024. Dealers are independent, and the reasons for changes in their inventory levels vary, including their expectations of future demand and product delivery times. Dealers’ demand expectations take into account seasonal changes, macroeconomic conditions, machine rentals and other factors. Delivery times can vary based on availability of product from Caterpillar factories and product distribution centers.
Current report — wording carried from elsewhere
Sales and Revenues by Geographic Region
Current report — wording carried from elsewhere
The chart above graphically illustrates reasons for the change in consolidated operating profit between the six months ended June 30, 2024 (at left) and the six months ended June 30, 2025 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company’s board of directors and employees. The bar titled Other includes consolidating adjustments and Machinery, Energy & Transportation’s other operating (income) expenses.
Current report — wording carried from elsewhere
Other Profit/Loss and Tax Items
Current report — wording carried from elsewhere
•Interest expense excluding Financial Products for the six months ended June 30, 2025, was $242 million, compared with $280 million for the six months ended June 30, 2024. The decrease was due to lower average debt outstanding and lower average borrowing rates.
Current report — wording carried from elsewhere
Please see a reconciliation of GAAP to non-GAAP financial measures on pages 67-69.
Current report — wording carried from elsewhere
•In North America, sales decreased due to lower sales volume and unfavorable price realization. Lower sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory decreased during the six months ended June 30, 2025, compared with an increase during the six months ended June 30, 2024.
Current report — wording carried from elsewhere
•Power Generation – Sales increased in large reciprocating engines, primarily data center applications.
Current report — wording carried from elsewhere
•Transportation – Sales decreased in marine. International locomotive deliveries were also lower.
Current report — wording carried from elsewhere
3 Elimination of interest expense recorded between Financial Products and ME&T.
Current report — wording carried from elsewhere
4 Elimination of discount recorded by ME&T on receivables sold to Financial Products and of interest earned between ME&T and Financial Products as well as dividends paid by Financial Products to ME&T.
Current report — wording carried from elsewhere
5 Profit attributable to common shareholders.
Current report — wording carried from elsewhere
3 Elimination of discount recorded by ME&T on receivables sold to Financial Products and of interest earned between ME&T and Financial Products as well as dividends paid by Financial Products to ME&T.
Current report — wording carried from elsewhere
4 Profit attributable to common shareholders.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
•Sales decreased in Latin America due to unfavorable currency impacts primarily related to the Brazilian real, unfavorable price realization and lower sales volume. Lower sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory decreased during the first quarter of 2025, compared with an increase during the first quarter of 2024.
Previous report — wording carried elsewhere
•In EAME, sales decreased primarily due to unfavorable price realization and lower sales volume. Lower sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory increased less during the first quarter of 2025 than during the first quarter of 2024.
Previous report — wording carried elsewhere
2 Elimination of net expenses recorded between ME&T and Financial Products.
Previous report — wording carried elsewhere
For the Three Months Ended March 31, 2025
Previous report — wording carried elsewhere
For the Three Months Ended March 31, 2024