CAT Q1 Earnings & Revenues Miss Estimates on Weak Volumes

Core Viewpoint - Caterpillar Inc. reported disappointing first-quarter results for 2025, with earnings and revenues falling short of consensus estimates due to lower sales volumes and unfavorable price realizations across all segments [1][2][3]. Financial Performance - Adjusted earnings per share were $4.25, missing the Zacks Consensus Estimate of$4.30 by 1% and down 24% year over year [1] - Total revenues for Q1 were approximately $14.2 billion, missing the consensus estimate of$14.5 billion by 2% and declining 10% year over year [2] - The cost of sales decreased 7% year over year to around $9 billion, while gross profit fell 14$5.28 billion, resulting in a gross margin of 37.1% compared to 38.8% in the previous year [5] Segment Performance - Machinery and Energy & Transportation (ME&T) sales decreased 11% year over year to around $13.4 billion [7] - Construction Industries' total sales dropped 19$5.18 billion, with significant declines in North America (24%) and Latin America (15%) [8] - Resource Industries segment sales fell 10% year over year to $2.88 billion, with a notable 14$6.57 billion, a 2% decrease from the previous year [10] Operational Metrics - Operating profit was reported at $2.58 billion, a 27$1.02 billion [12] - Financial Products' total revenues rose 2% year over year to $1 billion, but profit decreased to$215 million from $293 million [13] Cash Flow and Shareholder Returns - Operating cash flow for Q1 was$1.3 billion, down from $2.05 billion in the prior year, with the company returning around$4.3 billion to shareholders through dividends and share repurchases [14] Future Outlook - Caterpillar anticipates flat revenues for Q2 2025 year over year, with adjusted operating margins expected to be lower compared to Q2 2024 [15] - For 2025, excluding tariffs, revenues are expected to be roughly flat compared to 2024, with adjusted operating profit margins anticipated in the top half of the target range [16] - Considering tariffs, full-year revenues for 2025 are expected to decline slightly from 2024, maintaining previous expectations [17]