After back-to-back declining quarters, Caterpillar’s construction business was in the black for the third quarter of 2025, reporting an increase in sales despite being hit by nearly $600 million in tariffs during the three months.
Global construction sales and revenue was up 7% year-over-year in the third quarter to $6.8 billion, driven by a $568 million increase in sales volume. That increase offset a $262 million drop in price realization (the net difference between equipment's listed price and the actual selling price).
In North America, construction sales and revenue rose 8% to $3.9 billion. North American construction equipment retail sales in the third quarter were also up 11% year-over-year, driven by growth in residential and nonresidential construction.
During the third quarter of 2025, 7,897 new financed Caterpillar machines were sold, according to Fusable’s EDA equipment finance data. Popular models included the 255, 265 and 275 compact track loaders. EDA is owned by Fusable, parent company of Equipment World.
Third-quarter global construction profit, however, saw a 7% year-over-year dip to $1.4 billion. Caterpillar attributed this profit decline in part to lower price realization and unfavorable manufacturing costs of $174 million driven by tariffs.
The energy and transportation segment, which includes engines and turbines and recently became Cat’s largest revenue stream, saw a 17% revenue rise in the third quarter to $8.4 billion. North American revenue rose 26% to $4.1 billion.
Total sales and revenue for all Caterpillar’s segments for the third quarter were up 10% to $17.6 billion, mostly attributed to higher sales volumes and higher equipment sales. Year-to-date total revenue for the first nine months of the year was relatively unchanged at $48.5 billion.
Looking ahead, Caterpillar forecasts full year 2025 revenue will be “modestly higher” year-over-year, even when accounting for 2025 net incremental tariffs of around $1.6 billion to $1.75 billion. Caterpillar estimates its fourth-quarter net incremental tariffs alone will come in at $650 million to $800 million, with 55% expected to be incurred by the company’s construction equipment business.
Construction equipment dealer inventories are also forecast to decline slightly in the fourth quarter compared to the $1.6 billion decrease Cat reported in its 2024 fourth quarter.
