Caterpillar's adjusted operating margin fell to 18% in Q1 2026 on tariff-driven cost increases

Earnings
โดย Zacks Investment Research·Read original
Summary · why it matters

Caterpillar reported a 30-basis-point year-over-year decline in its adjusted operating margin to 18% in the first quarter of 2026, as cost of sales rose 26% due to unfavorable manufacturing costs including higher tariffs. Tariffs introduced since early 2025 amounted to approximately $600 million in the quarter, below the company's earlier estimate of $800 million, partly due to a one-time adjustment in 2025 tariff expense calculations. For full-year 2026, management expects tariff costs of $2.2 billion to $2.4 billion, following about $1.8 billion in 2025, and projects the adjusted operating margin near the bottom of its targeted range despite low double-digit sales growth. The company maintains its margin outlook of 15–19% at around $60 billion in revenues, 18–22% at $72 billion, and 21–25% at $100 billion. Among peers, Terex's operating margin contracted 30 basis points to 8.7% in Q1 2026, while Komatsu's margin fell 230 basis points to 13.7% in fiscal 2025 and is projected to decline further to 12.3% in fiscal 2026.

Impact on stocks 3

Energy Transition & Power Demand▼ · 1 stocks
Caterpillar Inc
CAT
▼ NegativeTariffrelevance

Tariff-driven cost increases caused adjusted operating margin to decline 30 bps in Q1 2026, with full-year tariff costs expected to rise to $2.2-2.4 billion.

Robotics & Physical AI▼ · 1 stocks
Komatsu Ltd.
6301
▼ NegativeTariffrelevance

Peer Komatsu's margin fell 230 bps in fiscal 2025 and is projected to decline further, reflecting industry-wide tariff impact.

Industrials▼ · 1 stocks
Terex Corporation
TEX
▼ NegativeTariffrelevance

Peer Terex also saw operating margin contract 30 bps in Q1 2026, attributed to similar tariff-driven cost pressures.

© 2026 MarketDXNews