Why Did Caterpillar Stock Fall Over 2% In After-Hours Trading?

It anticipates a Trump tariff impact of between $1.5 billion and $1.8 billion in 2025, compared with the previously forecasted $1.5 billion.

Caterpillar’s stock (CAT) slid 2.7% in extended trading on Thursday after it flagged a U.S. tariff impact of up to $1.8 billion in 2025, more than previously feared.

"While the company continues to take initial mitigating actions to reduce this impact, trade and tariff negotiations continue to be fluid," the company stated in a filing with the Securities and Exchange Commission.

U.S. President Donald Trump’s uncertain trade policy has weighed on the earnings of industrial machinery makers, which rely on a complex global supply chain. The world’s biggest mining and construction equipment maker imports a wide range of things, including engine parts and sensors, from abroad.

The company stated that it expects the third-quarter tariff impact to be between $500 million and $600 million, compared with the $500 million it projected earlier this month. It also anticipates a tariff hit of between $1.5 and $1.8 billion in 2025, compared with the $1.5 billion it had previously forecasted.

Retail sentiment on Stocktwits about Caterpillar was in the ‘bearish’ territory at the time of writing.

While Trump has announced several deals with key trading partners over the past two months, some of these deals have yet to be formalized. On Thursday, Japan’s top trade negotiator, Ryosei Akazawa, canceled his visit to Washington, D.C., over unresolved trade-related issues.

Caterpillar said on Thursday that, including the net impact from incremental tariffs, the company now expects its full-year adjusted operating profit margin to be near the bottom of the target margin range.

Caterpillar stock has gained nearly 19% this year.

Earlier this week, Norway’s sovereign wealth fund excluded the company from its holdings after its ethics watchdog flagged that Israeli authorities are using bulldozers manufactured by Caterpillar in the “widespread unlawful destruction of Palestinian property.”

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