Caterpillar Q1 2025 Earnings Report
Key Takeaways
Caterpillar experienced a decline in revenue and profit for Q1 2025 due to lower sales volume and unfavorable pricing, but continued strategic execution with strong shareholder returns and a record $5 billion increase in backlog.
Revenue declined 10% YoY to $14.25B, primarily due to lower sales volume and price realization.
Net income was $2.0B with GAAP EPS of $4.20 and adjusted EPS of $4.25.
Returned $4.3B to shareholders through buybacks and dividends.
Achieved record $5B increase in organic backlog in Q1.
Caterpillar
Caterpillar
Caterpillar Revenue by Segment
Forward Guidance
Caterpillar expects 2025 full-year adjusted margins and free cash flow to be within target ranges, with stable sales outlook under a base case and risks tied to tariffs and economic softening.
Positive Outlook
- Full-year 2025 sales and revenues expected to be flat compared to 2024.
- Adjusted operating profit margin projected in the top half of the target range.
- ME&T free cash flow also expected in top half of the $5B-$10B target range.
- Strong balance sheet and liquidity position maintained.
- Dealer inventory expected to remain flat through end of 2025.
Challenges Ahead
- Sales and revenues could be slightly down under a tariff-impact scenario.
- Adjusted margin may decline in Q2 2025 compared to Q2 2024.
- Tariff-related cost headwinds of $250M–$350M expected in Q2 2025.
- Higher credit loss provisions impacted Financial Products segment profit.
- Lower net yield on earning assets and absence of prior insurance settlement hurt profitability.
Revenue & Expenses
Visualization of income flow from segment revenue to net income