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Investing.com -- Caterpillar Inc. shares dropped 2.3% after the heavy equipment manufacturer reported second-quarter 2025 adjusted earnings that fell short of analyst expectations, despite posting better-than-expected revenue.
The construction and mining equipment giant reported adjusted earnings of $4.72 per share for the second quarter of 2025, falling short of analyst estimates of $4.90. Revenue came in at $16.6 billion, slightly above the consensus estimate of $16.27 billion but down 1% from $16.7 billion in the same quarter last year.
"The Caterpillar team remained focused on customer success and demonstrated solid operational performance this quarter," said CEO Joe Creed. "We continued to see strong orders across our segments as demand remains resilient supported by infrastructure spending and growing energy needs."
The company’s operating profit margin declined to 17.3% from 20.9% in the year-ago period, while adjusted operating profit margin fell to 17.6% from 22.4%. Caterpillar attributed the decrease in profits primarily to unfavorable manufacturing costs, largely reflecting the impact of higher tariffs.
By segment, Construction Industries sales fell 7% YoY to $6.19 billion, with segment profit dropping 29% to $1.24 billion. Resource Industries sales decreased 4% to $3.09 billion, with segment profit down 25%. Energy & Transportation was the bright spot, with sales increasing 7% to $7.84 billion and segment profit rising 4% to $1.59 billion.
During the quarter, Caterpillar generated $3.1 billion in enterprise operating cash flow and returned $1.5 billion to shareholders through $0.8 billion in share repurchases and $0.7 billion in dividends.
The company ended the quarter with $5.4 billion in enterprise cash.