CEO Joseph Creed said the company now anticipates that its full-year adjusted operating profit margin will be in the bottom half of the target margin range.
Caterpillar Inc. (CAT) is preparing for tighter margins in the second half of 2025 as CEO Joseph Creed emphasized that new tariffs are beginning to take a toll on operating performance.
Creed expects these trade measures, particularly those going into effect by August 7, to weigh heavily on profitability as the year progresses. “As I mentioned, the incremental tariffs announced in 2025 and expected to be in place by August 7 will be a headwind to profitability during the remainder of the year,” Creed said in the second-quarter (Q2) earnings call.
Caterpillar stock traded over 1% lower on Tuesday mid-morning. The stock garnered a 1,150% increase in user message count in 24 hours. However, on Stocktwits, retail sentiment around the stock jumped to ‘extremely bullish’ from ‘neutral’ territory the previous day. Message volume improved to ‘high’ from ‘normal’ levels in 24 hours.
A bullish Stocktwits user recommended buying the shares before a breakout.
However, a bearish user expressed dissatisfaction with the earnings.
Creed also added that the company now anticipates that its full-year adjusted operating profit margin will be in the bottom half of the target margin range. This reflects expectations that both the third and fourth quarters will see higher net tariff-related expenses compared to the second quarter.
The company’s Q2 revenue slipped 1% year-on-year (YoY) to $16.6 billion, beating the analysts’ consensus estimate of $16.3 billion, as per Fiscal AI data. Meanwhile, adjusted earnings per share (EPS) of $4.72 missed the consensus estimate of $4.9.
Caterpillar stock has gained over 19% year-to-date and over 36% in the last 12 months.
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