The tariff impact was felt across all three of Caterpillar $CAT's primary business segments. In Power & Energy, unfavorable manufacturing costs of $346 million — primarily reflecting higher tariff costs — offset gains from volume and pricing, leaving segment profit margin at 20.6%, down from 22.3% a year earlier. Construction Industries saw unfavorable manufacturing costs of $362 million tied to tariffs, though its segment profit still rose 50% to $1.5 billion as North American sales climbed 48%. Resource Industries was hit hardest in relative terms: segment profit fell 39% to $378 million, with the company citing unfavorable manufacturing costs largely driven by tariff costs as the primary cause.
Among the three segments, Construction Industries led in revenue expansion, with sales climbing 38% to $7.2 billion; dealer restocking of equipment inventory and better pricing both contributed to the gain. Power & Energy revenue rose 22% to $7 billion, with power generation sales up 41%, supported by demand from data center customers. Resource Industries revenue edged up 4% to $3.8 billion.
Caterpillar deployed $5.7 billion in cash during the quarter for share repurchases and dividends — $5 billion for stock buybacks and $0.7 billion for dividends. Enterprise operating cash flow was $1.9 billion, and the company ended the quarter with $4.1 billion in cash.
Shares jumped close to 5% before the opening bell after the results were released.
