Caterpillar expects tariffs to increase Q2 costs by $350 million

Caterpillar reported a decline in first-quarter 2025 sales, revenues, and profits, attributing the drops to lower dealer inventories and weakening global demand. The company anticipates a significant cost headwind of $250 million to $350 million in the second quarter of 2025 due to tariffs imposed under President Donald Trump, which are part of broader trade tensions affecting US companies. Despite these challenges, Caterpillar modestly raised its 2025 revenue outlook when excluding the impact of tariffs, projecting flat full-year revenue, but expects a slight decline in sales and revenues when tariffs are included. The company emphasized its strong balance sheet and record order backlog, while also noting that tariffs are beginning to impact corporate earnings across the US. Caterpillar's stock initially reacted negatively to the tariff news but showed resilience after the updated revenue outlook.