Caterpillar has said that tariffs resulting from Trump’s trade war will cost the company almost $200 million, so they are going to raise their prices to make that up:
THE HILL – Caterpillar Inc. announced Monday that it will raise prices for its products to offset the costs of President Trump’s recently imposed tariffs.
In a press release, the construction manufacturing giant said the tariffs on aluminum and steel imports announced by the Trump administration are expected to add around $100 million to $200 million in extra material costs.
The announcement came as part of the company’s report on second-quarter results, which showed sales and revenues up 24 percent from a year earlier.
You raise tariffs, prices go up. That’s how these things always work, especially for a successful company.
But don’t feel too bad for Caterpillar. They are apparently thriving these days due to the oil and gas boom in North America:
CNN MONEY – An oil and gas boom is helping Caterpillar.
Three months ago, the heavy equipment maker spooked Wall Street with a warning that its earnings had reached a “high-water mark.” The Dow fell nearly 425 points.
But the company reported record earnings for the second quarter Monday that easily topped forecasts and it also boosted its outlook.
CEO Jim Umpleby didn’t make it sound like company’s best days were behind it. He called the earnings “outstanding” in a press release.
Caterpillar (CAT) said the strong results were led by healthy demand for construction equipment in North America — particularly for oil and gas pipelines. Revenue for oil and gas equipment surged 39% from a year ago and the company said it was taking orders for delivery well into next year.
Caterpillar’s overall revenue rose 24% from last year. The company is considered an important bellwether for the global economy. If it is doing well, it’s usually a good sign because its customers are using bulldozers, excavators and other heavy duty equipment for construction, mining and farming.
It’s good for them their equipment is in such demand, as it helps them shrug off the trade war tariffs – at least for now.