Caterpillar warns of significant challenges due to U.S. tariffs, anticipating up to $1.5 billion in costs by 2025. Tariffs impact supply chain costs, leading to a $400-$500 million hit in the third quarter. Industrial firms report combined losses of $12.1-$13.4 billion in earnings due to tariffs, affecting profitability.

Despite price hikes to offset supply chain issues, Caterpillar faces margin pressures from weak U.S. construction activity and higher interest rates. Quarterly revenue in Asia Pacific and North America declines, with adjusted profit falling to $4.72 per share in the second quarter.

Caterpillar expects annual sales and revenue to be slightly higher in 2025, driven by demand for power generation products supporting data centers. Data center sales could be a bright spot, but company forecasts adjusted profit margins in the lower half of its target range due to tariffs.

Read more at Yahoo Finance: Caterpillar warns of $1.5 billion hit as tariffs to hurt profit more in second half