Cat Financial Reports Q1 2025 Revenue Growth Despite Profit Decline
Cat Financial has announced its first-quarter 2025 results, revealing a modest revenue increase of 1% compared to the same period in 2024. Despite the revenue growth, the company experienced a decline in profit due to several factors, including the absence of an insurance settlement and higher credit loss provisions.
- First-Quarter 2025 Revenue and Profit Overview:
- Revenues reached $860 million, a $7 million, or 1%, increase from $853 million in Q1 2024.
- Profit for the quarter was $130 million, marking a 23% decrease from $169 million in Q1 2024.
- Key Factors Affecting Profit:
- The decrease in profit was primarily attributed to the absence of a $33 million insurance settlement from Q1 2024.
- An unfavorable impact from a higher provision for credit losses of $22 million also contributed to the decline.
- Profit Before Income Taxes and Tax Provision:
- Profit before income taxes was $174 million, down 24% from $229 million in Q1 2024.
- The provision for income taxes was $44 million in Q1 2025, compared to $59 million in Q1 2024.
- Retail New Business Volume:
- Retail new business volume increased by 8%, reaching $2.96 billion, up from $2.74 billion in the first quarter of 2024.
- This growth was driven by higher volumes across all regions.
- Credit Losses and Portfolio Health:
- Past dues decreased to 1.58% in Q1 2025, from 1.78% in the previous year.
- Net write-offs for the quarter were $20 million, significantly lower than $55 million in Q1 2024.
- The allowance for credit losses as of March 31, 2025, was $282 million, or 0.95% of finance receivables, up from $267 million, or 0.91% at the end of 2024.
While Cat Financial’s first-quarter 2025 results reflect growth in revenue, the decline in profit highlights ongoing challenges such as credit losses and the absence of last year’s insurance settlement. Despite these challenges, Cat Financial remains focused on executing its strategy and ensuring the health of its portfolio to continue supporting its customers and dealers worldwide.
