CAT Caterpillar Inc

By Andrew Tangel 

Caterpillar Inc.'s revenue rose 18% in 2017, breaking a four-year streak of declining sales for the world's largest maker of heavy machinery.

This year the Deerfield, Ill.-based manufacturer expects its construction, mining and energy markets around the globe to continue gaining strength.

Still, Caterpillar reported a loss in the fourth quarter, as it booked a one-time charge related to changes to the U.S. tax code signed into law by President Donald Trump in late December.

The company booked a $2.4 billion charge related to repatriation of foreign profits and write downs of reduced deferred tax assets. Still, the company told investors that it would benefit in the long term through a lower corporate tax rate, greater ability to access overseas cash and a more equal playing field between it and foreign competitors. Caterpillar had $16 billion in overseas profits at the end of 2016.

"After four challenging years, many key markets improved in 2017," Chief Executive Jim Umpleby said.

Shares rose 3.1% in premarket trading.

Caterpillar's mining and construction markets around the world showed signs of turnaround throughout 2017. The company said Wednesday a rolling three-month average of global retail sales of its machinery rose 34% in December, up from 26% in November.

Mr. Umpleby, who took over his current job at that start of 2017, has said a prime focus under his watch would be profitable growth, rather than only increasing revenue.

For 2018, the company expects to report adjusted earnings per share of $8.25 to $9.25, above both the $8.19 that had been expected by Wall Street analysts and the $6.88 in adjusted earnings per share in 2017.

While the company cheered the new tax law's benefits, Caterpillar's earnings report said nothing about a Swiss subsidy that is at the center of a tax structure that has been under criminal investigation. Federal agents raided Caterpillar's headquarters and two other locations last year in the probe, which is focused on taxes and exports. The company hasn't been accused of wrongdoing and has said it believes its tax position is correct.

Overall for the fourth quarter, the company reported a loss of $1.3 billion, or $2.18 per share, compared with a loss of $1.17 billion, or $2 a share, a year ago. On an adjusted basis, which strips out the impact of the tax charge and other factors, the company earned $2.16 a share

Wall Street analysts expected adjusted earnings per share of $1.79, according to Thomson Reuters.

Caterpillar said revenue rose 35% in the quarter to $12.9 billion. Analysts expected $11.98 billion. In 2017, revenue increased to $45.5 billion.

The company added 4,800 jobs in the U.S. last year, a shift following years of deep cuts in its domestic workforce. Caterpillar said its domestic workforce rose to 50,500 employees, up from 49,700 at the end of September.

Austen Hufford contributed to this article.

Write to Andrew Tangel at Andrew.Tangel@wsj.com

(END) Dow Jones Newswires

January 25, 2018 08:52 ET (13:52 GMT)

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