“Now including the net impact from incremental tariffs, we anticipate a lower margin in Construction Industries versus the prior year.”

In context

“s the prior year. As I mentioned, the tariff headwind should be larger than it was in the third quarter. We anticipate a net cost headwind of about $650 million to $800 million in the fourth quarter. At this point, we expect tariffs to have a minimal impact to corporate items in the fourth quarter as our current assumptions are based on tariffs announced and expected to be in place on November 1. Now I'll make a few comments regarding our segment margin expectations for the fourth quarter. In Construction Industries, excluding the net impact from incremental tariffs, we expect a higher margin compared to the prior year. This is driven primarily by the profit impact from higher sales volume, though the benefit within volume is lessened by unfavorable product mix compared to the prior year. Now including the net impact from incremental tariffs, we anticipate a lower margin in Construction Industries versus the prior year. We expect about 55% of the fourth quarter net incremental tariff impact will be incurred in Construction Industries. In Resource Industries, excluding the net impact from incremental tariffs, we anticipate a higher margin versus the prior year, mainly due to higher sales volume, partially offset by unfavorable price realization. Including the net impact from incremental tariffs, we anticipate a lower margin in Resource Industries versus the prior year. We expect about 20% of the fourth quarter net incremental tariff impact will be incurred in Resource Industries. In Energy & Transportation, excluding the net impact from incremental tariffs, we anticipate a higher margin versus the prior year, mainly due to a higher sales volume and favorable price realization. Higher manufacturing costs s”