Caterpillar (CAT) is expected to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended June 2025. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.\n\nThe earnings report, which is expected to be released on August 5, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower.\n\nWhile management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise.\n\nThis construction equipment company is expected to post quarterly earnings of $4.88 per share in its upcoming report, which represents a year-over-year change of -18.5%.\n\nRevenues are expected to be $16.35 billion, down 2% from the year-ago quarter.\n\nThe consensus EPS estimate for the quarter has been revised 0.63% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.\n\nInvestors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change.\n\nPrice, Consensus and EPS Surprise Chart for CAT\n\nEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction).\n\nThe Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.\n\nThus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.\n\nA positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.\n\nPlease note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).\n\nFor Caterpillar, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -0.88%.\n\nOn the other hand, the stock currently carries a Zacks Rank of #3.\n\nSo, this combination makes it difficult to conclusively predict that Caterpillar will beat the consensus EPS estimate.\n\nWhile calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.\n\nFor the last reported quarter, it was expected that Caterpillar would post earnings of $4.3 per share when it actually produced earnings of $4.25, delivering a surprise of -1.16%.\n\nOver the last four quarters, the company has beaten consensus EPS estimates two times.\n\nBottom Line\n\nAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.\n\nThat said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.\n\nCaterpillar doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.\n\nAmong the stocks in the Zacks Manufacturing - Construction and Mining industry, Caterpillar (CAT), is soon expected to post earnings of $4.88 per share for the quarter ended June 2025. This estimate indicates a year-over-year change of -18.5%. This quarter's revenue is expected to be $16.35 billion, down 2% from the year-ago quarter.\n\nOver the last 30 days, the consensus EPS estimate for Caterpillar has been revised 0.6% up to the current level. Nevertheless, the company now has an Earnings ESP of -0.88%, reflecting a lower Most Accurate Estimate.\n\nThis Earnings ESP, combined with its Zacks Rank #3 (Hold), makes it difficult to conclusively predict that Caterpillar will beat the consensus EPS estimate. Over the last four quarters, the company surpassed consensus EPS estimates two times.\n\nStay on top of upcoming earnings announcements with the Zacks Earnings Calendar.\n\nWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report\n\nCaterpillar Inc. (CAT) : Free Stock Analysis Report\n\nThis article originally published on Zacks Investment Research (zacks.com).

Analysts Estimate Caterpillar (CAT) to Report a Decline in Earnings: What to Look Out for

Caterpillar (CAT) is expected to report a year-over-year decline in earnings for the quarter ended June 2025, with projected earnings of $4.88 per share (a -18.5% YoY change) and revenues of $16.35 billion (a 2% YoY decline). Analysts note the Zacks Earnings ESP of -0.88% and a Zacks Rank of #3, suggesting uncertainty around earnings surprises. The company has beaten consensus estimates twice in the last four quarters.