“As is typical, we expect first-quarter sales in power and energy will be the segment's lowest of the year and sequentially lower than 2025.”

In context

“us the prior year, driven by volume and favorable price realization. We expect continued sales to users growth with our confidence supported by the strong order rates and backlog. In addition, we anticipate a sizable benefit from changes in dealer inventories given a more typical seasonal pattern build in the first quarter. In Resource Industries, we anticipate strong sales growth versus the prior year driven by volume, including healthy sales to users growth, and a favorable impact from changes in dealer inventory. Price realization should be relatively flattish, though we anticipate favorability as we move through the year. In Power and Energy, we anticipate sales growth versus the prior year driven by strength in power generation and oil and gas, along with favorable price realization. As is typical, we expect first-quarter sales in power and energy will be the segment's lowest of the year and sequentially lower than 2025. This expectation aligns with the seasonal pattern. Now I'll provide some color on our first-quarter margin expectations. Excluding incremental tariff costs, we expect a higher adjusted operating profit margin percentage year over year supported by strong volume and price realization, partially offset by higher manufacturing costs and SG&A and R&D expenses tied to our strategic investments. As a reference, we would expect some seasonal margin uplift in the first quarter compared to 2025. Including incremental tariff costs at a level similar to the fourth quarter or around $800 million, margin is expected to be lower than versus the prior year. Now on to first-quarter margin expectations by segment. In Construction Industries, excluding incremental tariff costs, we anticipate a higher margi”