Cat Financial Announces First-Quarter 2025 Results

Rhea-AI Summary

Cat Financial reported mixed results for Q1 2025, with revenues slightly up but profits down significantly. Revenues increased 1% to $860 million, primarily due to higher average earning assets, while profit decreased 23% to $130 million.

The profit decline was mainly attributed to two factors: the absence of a $33 million insurance settlement from Q1 2024 and higher provision for credit losses of $22 million. However, retail new business volume showed strong growth, increasing 8% to $2.96 billion across all regions.

Portfolio health indicators were mixed, with past dues improving to 1.58% from 1.78% year-over-year. Write-offs decreased significantly to $20 million from $55 million in Q1 2024. The allowance for credit losses stood at $282 million, representing 0.95% of finance receivables.

Positive

• Retail new business volume increased 8% to $2.96B vs Q1 2024
• Past dues improved to 1.58% from 1.78% YoY
• Write-offs decreased significantly to $20M from $55M YoY
• Higher volume across all regions indicating strong market demand
• Revenues increased 1% to $860M vs Q1 2024

Negative

• Profit decreased 23% to $130M vs Q1 2024
• Profit before income taxes down 24% to $174M
• Higher provision for credit losses impacting profits negatively
• Allowance for credit losses increased to 0.95% from 0.91% since December 2024
• Lower average financing rates affecting revenue growth

News Market Reaction

+0.61%

1 alert

+0.61% News Effect

On the day this news was published, CAT gained 0.61%, reflecting a mild positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

NASHVILLE, Tenn., April 30, 2025 /PRNewswire/ -- Cat Financial reported first-quarter 2025 revenues of $860 million, an increase of $7 million, or 1%, compared with $853 million in the first quarter of 2024. The increase in revenues was primarily due to a favorable impact from higher average earning assets of $28 million, partially offset by an unfavorable impact from lower average financing rates of $15 million. First-quarter 2025 profit was $130 million, a decrease of $39 million, or 23%, compared with $169 million in the first quarter of 2024.

First-quarter 2025 profit before income taxes was $174 million, a decrease of $55 million, or 24%, compared with $229 million in the first quarter of 2024. The decrease was mainly due to the absence of an insurance settlement of $33 million in the first quarter of 2024 and an unfavorable impact from higher provision for credit losses of $22 million.

The provision for income taxes for the first quarter of 2025 was $44 million on $174 million profit before income taxes compared with $59 million on $229 million profit before income taxes for the first quarter of 2024.

During the first quarter of 2025, retail new business volume was $2.96 billion, an increase of $222 million, or 8%, compared with $2.74 billion in the first quarter of 2024. The increase was primarily driven by higher volume across all regions.

At the end of the first quarter of 2025, past dues at Cat Financial were 1.58%, compared with 1.78% at the end of the first quarter of 2024. Write-offs, net of recoveries, were $20 million for the first quarter of 2025, compared with $55 million for the first quarter of 2024. As of March 31, 2025, Cat Financial's allowance for credit losses totaled $282 million, or 0.95% of finance receivables, compared with $267 million, or 0.91% of finance receivables at December 31, 2024.

"The Cat Financial team continues to focus on execution of our strategy and maintaining strong portfolio health," said Dave Walton, President of Cat Financial and Senior Vice President with responsibility for the Financial Products Division of Caterpillar Inc. "Cat Financial remains committed to providing financial services solutions to Caterpillar customers and dealers worldwide."

About Cat Financial

Cat Financial is a subsidiary of Caterpillar, the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. Cat Financial provides a wide range of financing solutions to customers and Cat® dealers for machines, engines, Solar® turbines, genuine Cat parts and services. Headquartered in Nashville, Tennessee, Cat Financial serves customers globally with offices and subsidiaries located throughout North and South America, Asia, Australia, Europe and Africa. Visit cat.com to learn more about Cat Financial.

STATISTICAL HIGHLIGHTS:

FIRST-QUARTER 2025 VS. FIRST-QUARTER 2024 (ENDED MARCH 31, EXCEPT TOTAL ASSETS) (Millions of dollars)
	2025		2024		CHANGE
Revenues	$         860		$         853		1 %
Profit Before Income Taxes	$         174		$         229		(24) %
Profit (excluding profit attributable to noncontrolling interests)	$         130		$         169		(23) %
Retail New Business Volume	$      2,964		$      2,742		8 %
Total Assets at March 31 and December 31, respectively	$    34,423		$    34,084		1 %

FORWARD-LOOKING STATEMENTS

Certain statements in this press release relate to future events and expectations and are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "believe," "estimate," "will be," "will," "would," "expect," "anticipate," "plan," "project," "intend," "could," "should" or other similar words or expressions often identify forward-looking statements. All statements other than statements of historical fact are forward-looking statements, including, without limitation, statements regarding our outlook, projections, forecasts or trend descriptions. These statements do not guarantee future performance and speak only as of the date they are made, and we do not undertake to update our forward-looking statements.

Cat Financial's actual results may differ materially from those described or implied in our forward-looking statements based on a number of factors, including, but not limited to: (i) disruptions or volatility in global financial markets limiting our sources of liquidity or the liquidity of our customers, dealers and suppliers; (ii) failure to maintain our credit ratings and potential resulting increases to our cost of borrowing and adverse effects on our cost of funds, liquidity, competitive position and access to capital markets; (iii) changes in interest rates, currency fluctuations or market liquidity conditions; (iv) an increase in delinquencies, repossessions or net losses of our customers; (v) residual values of leased equipment; (vi) our compliance with financial and other restrictive covenants in debt agreements; (vii) government monetary or fiscal policies; (viii) political and economic risks, commercial instability and events beyond our control in the countries in which we operate; (ix) demand for Caterpillar products; (x) marketing, operational or administrative support received from Caterpillar; (xi) our ability to develop, produce and market quality products that meet our customers' needs; (xii) information technology security threats and computer crime; (xiii) alleged or actual violations of trade or anti-corruption laws and regulations; (xiv) new regulations or changes in financial services regulations; (xv) additional tax expense or exposure; (xvi) changes in accounting guidance; (xvii) catastrophic events, including global pandemics such as the COVID-19 pandemic; and (xviii) other factors described in more detail in Cat Financial's Forms 10-Q, 10-K and other filings with the Securities and Exchange Commission.

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SOURCE Cat Financial

FAQ

How much did Cat Financial's (CAT) revenue increase in Q1 2025?

Cat Financial's revenue increased by $7 million (1%) to $860 million in Q1 2025, compared to $853 million in Q1 2024, mainly due to higher average earning assets.

Why did Cat Financial's (CAT) profit decline in Q1 2025?

Cat Financial's profit decreased by 23% to $130 million in Q1 2025 due to the absence of a $33 million insurance settlement from Q1 2024 and a $22 million increase in provision for credit losses.

What was Cat Financial's (CAT) new business volume in Q1 2025?

Cat Financial's retail new business volume reached $2.96 billion in Q1 2025, showing an 8% increase from $2.74 billion in Q1 2024, with growth across all regions.

How did Cat Financial's (CAT) credit metrics perform in Q1 2025?

Past dues improved to 1.58% from 1.78% year-over-year, while write-offs decreased to $20 million from $55 million. The allowance for credit losses was 0.95% of finance receivables.

What drove Cat Financial's (CAT) revenue growth in Q1 2025?

The revenue growth was primarily driven by a $28 million favorable impact from higher average earning assets, partially offset by a $15 million unfavorable impact from lower average financing rates.