Caterpillar anticipates up to $1.5 billion in tariff-related expenses in 2025 amid stock rally

Caterpillar Inc. has forecasted that tariffs could lead to costs reaching approximately $1.5 billion this year, influencing investor sentiment positively as its stock gains. Despite missing profit targets in the second quarter, the company surpassed sales expectations and upgraded its annual growth outlook. During a recent earnings call, CEO Joe Creed acknowledged that tariffs are expected to pose challenges to profitability throughout the remainder of 2025. He noted that while initial measures have been taken to mitigate these impacts, ongoing trade negotiations keep the situation uncertain. Creed emphasized the company's intention to stay adaptable and implement long-term strategies once clarity is achieved. Caterpillar's financial presentation revealed an estimated net incremental tariff expense of about $1.3 billion to $1.5 billion for the year. These costs relate to tariffs announced for 2025, expected to be in effect by August 7, including some cost-control measures. The company now anticipates its full-year 2025 sales will be slightly higher than 2024, revising previous expectations of near-flat growth. For the upcoming third quarter, Caterpillar projects moderate sales g...