Caterpillar Inc. (NYSE:CAT) saw its stock drop 3% in premarket trading on Friday after the industrial equipment leader increased its estimate of tariffs’ effect on its 2025 financial results.
According to an SEC filing, the company now anticipates that the net impact of additional tariffs introduced in 2025 will range from roughly $500 million to $600 million in Q3 and about $1.5 billion to $1.8 billion for the full year. This revision comes following several new clarifications and tariff announcements since Caterpillar reported its Q2 earnings on August 5.
“What changed in 3 weeks? We sense the broader breadth of categories tied to steel & aluminum tariffs,” Bank of America analyst Michael Feniger commented. “This is likely to impact the Construction segment and drive an even higher weighting of tariff headwinds to that segment vs others.”
He added, “We do not believe this headwind is isolated to CAT. A theme through earnings is that tariff headwinds are higher than expected, and this continues to rise into Q3.”
Despite the heavier tariff burden, Caterpillar said that its sales and revenue guidance shared during the Q2 earnings call remains intact. Still, the company now expects its full-year adjusted operating profit margin to fall “near the bottom of the target margin range” due to the tariff pressures.
The construction and mining equipment giant noted it is taking “initial mitigating actions” to lessen the tariffs’ effects but acknowledged that “trade and tariff negotiations continue to be fluid.”
Caterpillar is scheduled to provide additional updates during its third-quarter earnings release and conference call on October 29, 2025.
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