Caterpillar to face another tough quarter as demand weakens

U.S. construction and mining equipment manufacturer Caterpillar Inc. (NYSE: CAT) is expected to report a -7% year-on-year decline in total revenue to $14.7 billion for the first quarter of 2025, according to Visible Alpha consensus estimates.  Machinery, energy & transportation (ME&T), the company’s largest revenue segment, is estimated to see revenues drop –7.4% to $13.9 billion in Q1 2025. This follows a -6% drop in the previous quarter, as weakening demand weighed on sales. The slowdown in demand is expected to persist, with ME&T volume projected to contract by –5.8% and price growth by –1.53%, signaling a broader slowdown in organic growth.

Higher borrowing costs and economic uncertainty in the U.S. have prompted customers to favor renting equipment over outright purchases, denting Caterpillar’s machinery sales. Meanwhile, ongoing trade disruptions brought on by the tariff situation in the U.S. could add to the challenges. Caterpillar’s full-year revenue is projected to fall –2.5% to $63 billion—extending last year’s -3% decline. Volume growth is also expected to shrink, reflecting soft consumer spending. However, the anticipated drop is likely to be less severe than last year’s contraction.