“As a reference, we would expect some seasonal margin uplift in the first quarter compared to 2025.”

In context

“zation 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 margin percentage compared to the prior year, on favorable price realization and volume, partially offset by higher manufacturing costs. In Resource Industries, excluding incremental tariff costs, we anticipate a slightly lower margin percentage compared to the prior year, favorable volume is more than offset by unfavorable manufacturing costs and higher SG&A and R&D expenses, including spend on strategic investments in autonomy. We do anticipate some unfavorable mix impact, as we expect prop”