Caterpillar Inc (NYSE:CAT) stock fell 0.54% (As on August 6, 11:25:21 AM UTC-4, Source: Google Finance) after the company posted mixed result for the second quarter of FY25. Caterpillar witnessed revenue declines of 2% in North America, 4% in Latin America and 2% in Asia Pacific. EAME was the only bright spot, delivering 6% growth. Caterpillar reported a record sequential backlog growth of $2.5 billion in the quarter. Its backlog is currently a solid $37.5 billion. Cost of sales increased 6.5% year over year to approximately $10.8 billion, primarily driven by unfavorable manufacturing costs, including the impact of higher tariffs. Gross profit was down 12% to $5.76 billion from the prior-year quarter. The gross margin was 34.8% compared with 39.2% in the year-ago quarter. Adjusted operating profit was around $2.92 billion, down 22% from the year-ago quarter. The adjusted operating margin was 17.6% compared with 22.4% in the second quarter of 2024.

Moreover, Machinery and Energy & Transportation (ME&T) sales dipped 1% year over year to around $15.67 billion. Construction Industries’ total sales were down 7% year over year to $6.19 billion on lower sales volume and unfavorable price realization. The impact of changes in dealer inventories weighed on volumes in the quarter. Regionally, sales dropped 15% in North America and 20% in Latin America, which was offset by a 13% rise in EAME and 6% in Asia/Pacific. The segment’s total sales were lower than our estimate of $6.37 billion. Total sales in the Resource Industries segment were down 4% year over year to $3.09 billion, mainly owing to unfavorable price realization and somewhat lower volumes. Sales of the Energy & Transportation segment were around $7.84 billion, a 7% increase from last year’s quarter aided by higher sales volumes, favorable currency impacts and price realization.

CAT in the second quarter of FY25 has reported the adjusted earnings per share of $4.72, missing the analysts’ estimates for the adjusted earnings per share of $4.88, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue decline of 1 percent to $16.57 billion in the second quarter of FY25, beating the analysts’ estimates for revenue of $16.35 billion. This is due to an unfavorable price realization of $414 million offset higher sales volume of $237 million. Higher sales volume was mainly driven by increased sales of equipment to end users.