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(Bloomberg) -- Caterpillar Inc. shares fell the most in three months after the heavy equipment maker warned that revenues will be “slightly lower” in 2025 with demand concerns weighing on its outlook.
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The stock fell as much as 5.1% as of 9:31 a.m. in New York, its biggest intraday decline since the end of October.
Caterpillar’s guidance, disclosed with its fourth-quarter earnings report, arrives at a tenuous time for global manufacturers, given the tariff threats by US President Donald Trump that could drive up costs and affect supply chains worldwide. The warning comes as Caterpillar reported fourth-quarter profit that beat Wall Street estimates due in part to higher-than-anticipated construction demand.
“Overall, we currently anticipate 2025 sales and revenues to be slightly lower compared to 2024,” Chief Executive Officer James Umpleby said during an earnings call. “We expect continued strength in Energy & Transportation to mostly offset lower sales in Construction Industries and Resource Industries.”
Caterpillar is viewed as a bellwether for global economic growth since it supplies heavy equipment to the construction, mining and energy industries around the world. Executives are anticipating waning demand for construction equipment — the company’s biggest division by far.
“Although we anticipate the combined nonresidential and residential construction spend to remain similar to 2024 levels, our current planning assumptions reflect lower demand for new equipment,” Umpleby said on the call.
Investors also have been concerned by elevated inventories of Caterpillar machines at dealerships that sell to consumers. Such stockpiles provide an insight into demand — high inventories suggest customers aren’t buying machines off dealer lots and low levels indicate strong consumption. Caterpillar said Thursday that it isn’t expecting a significant change in dealer inventories this year.
“Management’s 2025 commentary seems to suggest an outlook that’s below consensus, which is likely to put downward pressure on estimates,” Christopher Ciolino, Bloomberg Intelligence’s senior industry analyst, wrote in a note.
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