Caterpillar’s Resource Industries segment saw first-quarter sales rise 4% to $3.8 billion while its profit plunged 39% to $378 million, driving margins down 700 basis points to 10.0%. Tariffs and rising costs trimmed about 500 basis points, highlighting fragility in the company’s industrial core despite 22% overall revenue growth.
Caterpillar’s Resource Industries segment generated $3.8 billion in first-quarter sales, a 4% increase year-over-year, while its profit plunged 39% to $378 million. This drove segment margin down 700 basis points to 10.0%, marking its lowest level in recent cycles.
Rising material and logistics costs combined with tariffs trimmed roughly 500 basis points off the segment’s margin. These pressures illustrate how external factors can erode profitability even as order intake remains elevated.
Overall company revenue grew 22% in the quarter, powered by strong demand in Power and Energy and AI-related infrastructure. However, a price-to-sales multiple of 6.7, well above the ten-year high of 4.6, raises concerns that valuations may not fully account for weakness in the industrial core.
