:max_bytes(150000):strip_icc()/GettyImages-2206379204-aaa5fd08c42d4fef80e553b4a1a851f0.jpg "Caterpillar Stock Drops as It Expects Tariffs Hit of Up to .8B This Year")
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Key Takeaways
- Caterpillar said tariffs would hurt results in both the current quarter and full year.
- The big equipment manufacturer expects tariffs to cost up to $600 million in the third quarter and $1.8 billion in 2025. Earlier this month, it said it expected 2025 net incremental tariffs around $1.3 billion to $1.5 billion.
- Caterpillar also lowered its previous outlook for full-year operating profit margin.
Caterpillar (CAT) shares fell 3% Friday, a day after the maker of big farm and construction equipment warned tariffs would negatively impact its results by a greater amount the rest of the year.
The company wrote in a regulatory filing that it expects tariffs to cost about $500 million to $600 million in the third quarter and approximately $1.5 to $1.8 billion for 2025. Earlier this month, it said it expected 2025 net incremental tariffs around $1.3 billion to $1.5 billion.
In addition, Caterpillar sees full-year adjusted operating margin to be near the bottom of the target range. In its second-quarter earnings call Aug. 5, the company said that excluding tariffs, it anticipated adjusted operating margin to be in the top half of its target range. However, it doesn’t see any change in its 2025 sales and revenue outlook that was given then.
The company explained that it was providing this update as “several additional clarifications and additional tariffs have been announced” since the second quarter. It noted that further updates would come during the Q3 report and earnings call on Oct. 29.
Despite today’s declines, shares of Caterpillar are up 17% year-to-date.
UPDATE—This article has been updated with the latest share price information.
