Caterpillar’s fourth-quarter results reflect a global economy, with sales boosted by AI-related spending, despite warning investors of a $2 billion-plus tariff impact ahead. Quarterly sales in power and energy segment surged over 20%, making it the largest business. Orders for prime power systems are rising due to increased demand for continuous electricity.

The company predicts tariff-related costs of $2.6 billion in 2026, surpassing last year’s $1.8 billion. Industrial firms, hit hard by Trump’s tariffs, have struggled with forecasts and price hikes. Analysts warn of ongoing tariff headwinds affecting profit margins through 2026. Caterpillar expects adjusted operating profit margin to be near the lower end of the target range.

Caterpillar’s adjusted profit per share for Q4 was $5.16, up from $5.14 the previous year, with revenue climbing to $19.1 billion from $16.2 billion. Analysts projected a quarterly profit of $4.68 per share and revenue of $17.86 billion. Despite tariff challenges, Caterpillar’s stock rose about 4.4% in early trading.

Read more at Yahoo Finance: Caterpillar gets a big AI sales boost as tariffs drag