Caterpillar Hit by Tariff Costs But Strong Sales Bring Revenue Increases
Caterpillar reported $17.638 billion in revenue in the third quarter of 2025, compared to $16.106 billion in the third quarter of 2025, a 9.5-percent increase. The increase in sales volume was primarily the result of higher sales to end users. Sales were higher across Caterpillar’s three primary segments.
Sales in Construction Industries increased from $6.345 billion in Q324 to $6.760 billion in the recently concluded quarter, a 6.5-percent increase. The Resource Industries segment increased from $3.048 billion a year ago to $3.110 billion, a 2-percent incline. The Energy & Transportation segment posted the largest increase, from $7.187 billion to $8.396 billion, a 16.8-percent clip. Also, the Financial Products segment jumped from $1.034 billion to $1.076 billion, a 4.1-percent increase.
“Solid performance from our team generated strong results this quarter, driven by resilient demand and focused execution across our three primary segment,” said Caterpillar CEO Joe Creed. “Our team’s continued discipline in a dynamic environment, coupled with a growing backlog, positions us for sustained momentum and long-term profitable growth.”
Tariffs hit hard
The impact of higher tariffs was strongly felt in Resource Industries. Segment profit was $499 million, a decrease of $120 million or 19 percent, compared with $619 million in the third quarter of 2024. The decrease was primarily the result of unfavorable manufacturing costs of $82 million, which primarily reflected the impact of higher tariffs.
In North America, third quarter sales increased 8 percent year over year, with a 6-percent hike in EAME and a 3-percent include in the Asia/Pacific region. Sales in Latin America declined by 1 percent.
Tariffs impacted the Energy & Transportation division. Total sales were $8.397 billion in the third quarter of 2025, an increase of $1.210 billion, or 17 percent, compared with $7.187 billion in the third quarter of 2024. The increase was primarily from higher sales volume of $870 million and higher inter-segment sales of $156 million.
• Oil and Gas – Sales increased for turbines and turbine-related services. Sales also increased in reciprocating engines used in gas compression applications.
• Power Generation – Sales increased in large reciprocating engines, primarily data center applications.
• Industrial – Sales increased in EAME, partially offset by decreased sales in Asia/Pacific.
• Transportation – Sales increased in rail services. Energy & Transportation’s segment profit was $1.678 billion in the third quarter of 2025, an increase of $245 million, or 17%, compared with $1.433 billion in the third quarter of 2024. The increase was primarily the result of the profit impact of higher sales volume of $357 million and favorable price realization of $132 million, partially offset by unfavorable manufacturing costs of $287 million. Unfavorable manufacturing costs primarily reflected the impact of higher tariffs.
Construction Industries’ total sales were $6.760 billion in the third quarter of 2025, an increase of $415 million, or 7 percent, compared with $6.345 billion in the third quarter of 2024. The increase in sales was mainly because of higher sales volume of $568 million and favorable currency impacts of $69 million, primarily related to the euro, partially offset by unfavorable price realization of $262 million. Higher sales volume was primarily driven by higher sales of equipment to end users.
• In North America, sales increased from higher sales volume, partially offset by unfavorable price realization.
• Sales decreased in Latin America because of unfavorable price realization, partially offset by higher sales volume and favorable currency impacts primarily related to the Brazilian real.
• In EAME, sales increased mainly due to higher sales volume and favorable currency impacts primarily related to the euro, partially offset by unfavorable price realization.
• Sales increased in Asia/Pacific mainly because of higher sales volume and favorable currency impacts primarily related to the Japanese yen. Higher sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory increased during the third quarter of 2025, compared with a decrease during the third quarter of 2024.
Construction Industries’ segment profit was $1.377 billion in the third quarter of 2025, a decrease of $109 million, or 7 percent, compared with $1.486 billion in the third quarter of 2024. The decrease was primarily because of unfavorable price realization of $262 million and unfavorable manufacturing costs of $174 million (the impact of higher tariffs), partially offset by the profit impact of higher sales volume of $313 million.
About the Author
Michael Roth
Editor
Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a professional journalist. Roth has visited hundreds of rental centers and industry manufacturers, written hundreds of feature stories for RER and thousands of news stories for the magazine and its electronic newsletter RER Reports. Roth has interviewed leading executives for most of the industry’s largest rental companies and manufacturers as well as hundreds of smaller independent companies. He has visited with and reported on rental companies and manufacturers in Europe, Central America and Asia as well as Mexico, Canada and the United States. Roth was co-founder of RER Reports, the industry’s first weekly newsletter, which began as a fax newsletter in 1996, and later became an online newsletter. Roth has spoken at conventions sponsored by the American Rental Association, Associated Equipment Distributors, California Rental Association and other industry events and has spoken before industry groups in several countries. He lives and works in Los Angeles when he’s not traveling to cover industry events.