Caterpillar beat Q3 revenue and EPS estimates with $17.64 billion in sales and $4.95 adjusted EPS, despite a 4.3% year-over-year earnings decline and a fall in operating margin to 17.3% due to manufacturing costs and tariffs. Energy & Transportation led growth, Construction Industries and Resource Industries showed modest gains, and $3.7 billion in operating cash flow funded $1.1 billion in dividends and buybacks. Deere posted Q4 revenue growth but saw full-year net income drop 29% to $5.03 billion as higher production costs and tariffs compressed margins; Small Agriculture & Turf profits collapsed while Construction & Forestry expanded.
"Caterpillar posted Q3 revenue of $17.64 billion, beating the $16.77 billion estimate by 5%. Adjusted earnings per share came in at $4.95, above the $4.52 consensus, though down 4.3% from $5.17 a year earlier. Operating margin fell from 19.5% to 17.3% as manufacturing costs and tariffs bit into profitability. CEO Joe Creed pointed to "resilient demand and focused execution," with Energy & Transportation leading at 17% sales growth to $8.40 billion. Construction Industries grew 7%, and Resource Industries added 2%."
"Deere reported Q4 revenue of $12.39 billion, up 14.5% year over year, but full-year net income dropped 29% to $5.03 billion. Production & Precision Agriculture saw a 10% sales increase to $4.74 billion but operating profit fell 8% due to higher production costs and tariffs. Small Agriculture & Turf operating profit collapsed 89%. Construction & Forestry was the bright spot, with sales up 27% to $3.38 billion and operating profit up 6%."
"Diversification Shields One. Cycle Exposure Punishes the Other. Caterpillar's three-segment model spreads risk. Energy & Transportation growth offset softer mining demand, and construction stayed steady. The 17.3% operating margin, while down, still reflects pricing power and operational discipline. Deere is more exposed to agricultural cycles, and farmers are pulling back hard."
Read at 24/7 Wall St.
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