Caterpillar Inc.: Q4 FY2025 earnings call

What management said about Q4 FY2025, from the documents filed with the SEC on 29 January 2026: press release. The quarter’s numbers.

Read the filing

Key takeaways

• Power & Energy sales and profit grew: Sales rose 23% to $9.400 billion on volume and price. Segment profit rose 25% to $1.841 billion, a 19.6% margin against 19.3%. Source
• Power generation sales rose 44%: Power generation application sales were $3.238 billion, up 44%. Large reciprocating engines, mainly for data centers, and turbines both increased. Source
• Higher tariffs drove manufacturing costs: Management said the unfavorable manufacturing costs in the quarter largely reflected higher tariffs, in each of the three primary segments. Source
• Operating margin fell to 13.9%: Operating profit margin was 13.9% against 18.0%. Adjusted operating profit margin, excluding restructuring costs, was 15.6% against 18.3%. Source
• Record backlog entering the new year: Management said the company enters the new year with a record backlog. The release gives no backlog figure. Source
• $7.9 billion returned to shareholders: Cash deployed in 2025 was $5.2 billion for share repurchases and $2.7 billion for dividends. Source

“Our centennial year marked a significant milestone, underscored by the highest full-year sales and revenues in Caterpillar’s history and a single-quarter record of $19.1 billion,”

Caterpillar CEO Joe Creed

What changed from last quarter

• New: Energy & Transportation is now Power & Energy, and Machinery, Energy & Transportation is now Machinery, Power & Energy (MP&E) in the supplemental data. Source
• Ended: The prior release used the Machinery, Energy & Transportation (ME&T) grouping, which the fourth-quarter release replaces with MP&E.
• New: Adjusted profit per share now excludes pension and OPEB mark-to-market remeasurement gains as well as restructuring costs. The third-quarter release excluded restructuring only. Source

Full-year and fourth-quarter results

• Record full-year and quarterly sales: Fourth-quarter sales rose 18% to $19.1 billion. Full-year sales rose 4% to $67.6 billion, the highest in company history, with higher volume the main driver. Source
• Quarterly profit per share versus last year: Profit per share was $5.12 against $5.78. Adjusted profit per share was $5.16 against $5.14, excluding restructuring and pension mark-to-market gains. Source
• Full-year profit per share versus 2024: Full-year profit per share was $18.81 against $22.05. Adjusted profit per share was $19.06 against $21.90. Source

Segment sales and profit

• Construction Industries sales up, profit down: Sales were $6.926 billion, up 15% mainly on volume. Segment profit fell 12% to $1.030 billion, a 14.9% margin against 19.6%. Source
• Resource Industries profit fell 24%: Sales rose 13% to $3.353 billion. Segment profit fell 24% to $360 million, a 10.7% margin against 15.8%. Source
• Power & Energy sales and profit grew: Sales rose 23% to $9.400 billion on volume and price. Segment profit rose 25% to $1.841 billion, a 19.6% margin against 19.3%. Source
• Financial Products profit rose 58%: Revenues rose 7% to $1.095 billion. Segment profit rose 58% to $262 million. Source

“These results demonstrate the strength of our end markets and our disciplined execution.”

Caterpillar CEO Joe Creed

Products and end markets

• Power generation sales rose 44%: Power generation application sales were $3.238 billion, up 44%. Large reciprocating engines, mainly for data centers, and turbines both increased. Source
• Oil and gas turbine sales increased: Oil and gas application sales were $2.398 billion, up 24%, with turbines and turbine-related services higher. Source
• Equipment sales to end users drove volume: Management attributed the quarter's volume increase mainly to equipment sales to end users, with dealer inventory changes also contributing. Source

Costs, margins and pricing

• Operating profit fell on manufacturing costs: Operating profit fell $264 million to $2.660 billion. Higher volume added $1.072 billion, offset by $1.030 billion of manufacturing costs and $282 million of higher restructuring. Source
• Higher tariffs drove manufacturing costs: Management said the unfavorable manufacturing costs in the quarter largely reflected higher tariffs, in each of the three primary segments. Source
• Operating margin fell to 13.9%: Operating profit margin was 13.9% against 18.0%. Adjusted operating profit margin, excluding restructuring costs, was 15.6% against 18.3%. Source
• Full-year price realization was unfavorable: Full-year sales growth included $3.4 billion of higher volume, partly offset by $0.8 billion of unfavorable price realization. Source

Demand, backlog and dealer inventory

• Total dealer inventory about flat: Total dealer inventory was about flat in the quarter, against a $1.3 billion decrease a year earlier. Machine dealer inventory fell $500 million. Source
• Record backlog entering the new year: Management said the company enters the new year with a record backlog. The release gives no backlog figure. Source
• Sales higher across all three segments: All three primary segments reported higher sales. Construction Industries and Resource Industries sales in Asia/Pacific were lower. Source

Capital, cash and shareholder returns

• Operating cash flow and enterprise cash: Enterprise operating cash flow was $11.7 billion for 2025. Enterprise cash at year-end was $10.0 billion. Source
• $7.9 billion returned to shareholders: Cash deployed in 2025 was $5.2 billion for share repurchases and $2.7 billion for dividends. Source
• Capital spending rose in 2025: Capital expenditures excluding equipment leased to others were $2.821 billion, against $1.988 billion. Spending on equipment leased to others was $1.465 billion, against $1.227 billion. Source

Financial Products credit and profit

• Insurance and earning assets lifted profit: Financial Products profit gains came from Insurance Services margins up $37 million and higher average earning assets up $34 million. Lower Cat Financial credit provisions added $19 million. Source
• Past dues declined at Cat Financial: Past dues at Cat Financial were 1.37% at year-end, down from 1.56%. Write-offs, net of recoveries, were $101 million for 2025, against $115 million. Source
• Credit loss allowance as a share of receivables: The allowance for credit losses was $284 million, or 0.86% of finance receivables, against $267 million, or 0.91%, at year-end 2024. Source

Tax, other income and corporate items

• Effective tax rate rose sharply: The fourth-quarter effective tax rate was 23.5% against 14.3%. Excluding discrete items, the global annual rate was 24.1% against 22.2%. Source
• Pension remeasurement gains taxed and excluded: A $68 million tax charge was recorded on $294 million of pension and OPEB mark-to-market gains. These gains are excluded from adjusted profit per share. Source
• Corporate items expense increased: Corporate items and eliminations expense was $690 million, up $463 million, driven by higher restructuring costs and timing differences. Source

Figures management reported

Risks management discussed

• Regulatory: Higher tariffs raised manufacturing costs in the quarter across the three primary segments, which management cited as the main cause of unfavorable manufacturing costs. Source
• Operational: Restructuring costs rose $282 million, mainly from write-downs in the value of inventory in the Rail division. Source
• Demand: In Construction Industries, Asia/Pacific sales decreased on lower volume, with dealer inventory decreasing more than in the prior year quarter. Source

Earlier plans management reported on

• Not stated: The third-quarter release said adjusted profit per share for the fourth quarter and full-year 2025 would exclude pension and OPEB remeasurement gains. The fourth-quarter release applies that exclusion.

Other quarters

• Q2 FY2026 earnings call
• Q1 FY2026 earnings call
• Q3 FY2025 earnings call
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.