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November 4, 2025 • 3 min read
Caterpillar Inc. (NYSE: CAT), a global bellwether for economic activity, recently released its financial results for the third quarter of 2025. The report shows a company successfully boosting its top line with strong sales, but simultaneously wrestling with cost pressures that are squeezing profitability. Let's explore the key takeaways from the company's latest 10-Q filing with the SEC.
For the quarter ending September 30, 2025, Caterpillar posted total sales and revenues of $17.638 billion, a solid 10% increase from the $16.106 billion reported in the same quarter last year. However, this revenue growth did not flow through to the bottom line.
Operating profit for the quarter was $3.052 billion, a 3% decrease from $3.147 billion in Q3 2024. This led to a diluted profit per share of $4.88, down from $5.06 in the prior-year period.
This flow diagram provides a visual breakdown of Caterpillar's quarterly revenue sources and how they are offset by various costs to arrive at the final profit.
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The consolidated results conceal a notable divergence in performance across Caterpillar's main business segments.
Energy & Transportation: The Growth Leader This segment was the standout performer. Sales jumped 17% to $8.397 billion, with segment profit also rising 17% to $1.678 billion. This robust growth was driven by strong demand for large reciprocating engines used in applications like data centers, as well as higher sales in the oil and gas sector.
Construction Industries: More Sales, Less Profit Caterpillar's largest segment, which includes its iconic construction machinery, saw revenues increase by 7% to $6.760 billion, largely due to higher equipment sales to end-users in North America. Despite selling more, the segment's profit fell by 7% to $1.377 billion. This suggests that higher manufacturing costs and less favorable pricing significantly compressed profit margins.
Resource Industries: Facing Headwinds The Resource Industries segment, serving the mining sector, experienced a tough quarter. While sales grew a modest 2% to $3.110 billion, segment profit declined sharply by 19% to $499 million, highlighting the significant cost pressures impacting this part of the business.
Despite the margin challenges, Caterpillar's financial health remains strong. For the first nine months of 2025, the company generated $8.148 billion in operating cash flow, demonstrating its ability to convert operations into cash effectively.
The company continued its commitment to returning capital to shareholders. During the third quarter, Caterpillar repurchased 847,999 shares of its common stock for $362 million. For the first nine months of the year, share buybacks reached a substantial $3.95 billion.
Caterpillar's Q3 2025 results present a picture of a company with clear areas of strength and notable challenges. The Energy & Transportation segment is performing exceptionally well, providing a vital boost to overall results. However, the core construction and mining equipment businesses are facing significant margin compression.
Looking forward, the company stated it expects "sales and revenues to increase modestly compared to 2024." The primary challenge for Caterpillar will be to navigate the complex cost environment and implement effective pricing strategies to ensure its healthy sales growth translates into stronger profitability across all its segments.
Last updated: November 4, 2025