Caterpillar’s First-Quarter Profit Declines Amid Economic Headwinds

Caterpillar reported a decrease in first-quarter earnings on Wednesday, impacted by reduced demand for its construction machinery attributed to global economic uncertainties. The company also indicated that annual revenue might slightly decrease compared to the previous year, factoring in the potential effects of tariffs.

The corporation, often viewed as a barometer for the health of the global economy, presented two distinct forecasts for its annual performance, one of which considered the possible consequences of tariffs on its sales and overall revenue.

The industrial heavyweight previously saw gains from the former President Joe Biden’s 2021 infrastructure initiative, a substantial $1 trillion investment package that spurred increased demand for construction-related equipment.

However, that upward trend has begun to lose momentum as the commencement of new projects slows and private sector investments demonstrate some caution in response to rising interest rates.

Elevated borrowing expenses and ongoing inflationary pressures have further compelled dealers to readjust their inventory to better align with current demand levels.

The adjusted quarterly profit per share experienced a decline, settling at $4.25, in contrast to $5.60 during the same period last year. Caterpillar’s sales and revenue for the quarter ending in March saw a reduction to $14.2 billion, down from $15.8 billion in the prior year.