Adds analyst comment in paragraph 10

By Shivansh Tiwary

Jan 30 (Reuters) - Caterpillar CAT.N warned of a slight sales drop in 2025, as dealers scale back purchase of equipment due to weak demand driven by high borrowing costs and persistent inflation, sending its shares down 3.2% on Thursday.

The company, which is viewed as a bellwether for global economic growth, also said it expects adjusted operating profit margin in the first quarter to be lower than a year ago.

Contractors are adopting a wait-and-see approach to buying new machinery against the backdrop of growing uncertainty over government spending under the Trump administration.

Finance chief Andrew Bonfield said if deregulation efforts boost U.S. economic growth, it would benefit Caterpillar.

Meanwhile, the initial surge in demand from government projects under former President Joe Biden's 2021 infrastructure law, a $1 trillion push to upgrade roads and bridges, has also tapered off.

Sales in Caterpillar's construction industries segment fell nearly 8% to $6 billion, while that in its resources industries unit fell 9% to $2.96 billion.

"Customers continue to display capital discipline, although key commodities remain above investment thresholds," CEO Jim Umpleby said about the resources unit, underscoring the company's anticipation of lower sales in segment in 2025.

Caterpillar does not provide a financial forecast but rather comments on its expectations.

Higher borrowing costs, the Federal Reserve's cautious pace of interest-rate cuts and persistent inflation have also compelled dealers to scale back purchases to better align with demand trends.

"We suspect that customers are opting to rent equipment over direct purchases amid macroeconomic uncertainty, cutting into sales of CAT machinery," CFRA Research analyst Jonathan Sakraida said.

For the fourth quarter, Caterpillar reported an adjusted profit of $5.14 per share, beating expectations of $5.02, benefiting from strong pricing in its energy and transportation segment.

Its sales and revenue for the quarter fell 5% to $16.22 billion, compared with Wall Street expectations of $16.39 billion, according to LSEG data.

(Reporting by Shivansh Tiwary in Bengaluru; Editing by Arun Koyyur)

((Shivansh.Tiwary@thomsonreuters.com; +91 9708363192; X: @Shivansh_19_;))