CAT Caterpillar Inc

By Andrew Tangel and Robert Tita 

Caterpillar Inc.'s revenue rose 18% in 2017, breaking a four-year streak of declining sales, as the world's largest maker of heavy machinery benefited from strength in its mining and construction markets around the globe.

The Deerfield, Ill.-based manufacturer said it expects sales growth also to continue in 2018.

Caterpillar reported a loss in the fourth quarter, as it took a one-time charge related to changes to the U.S. tax code signed into law by President Donald Trump in late December. However, earnings excluding the tax charges and other items topped analysts' expectations.

The company booked a $2.4 billion charge stemming from a mandatory tax on stockpiled overseas profit, which totaled $16 billion at the end of 2016. 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.

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

Caterpillar shares rose 0.93% to $169.99.

Overall for the fourth quarter, Caterpillar 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.

Another U.S. manufacturer, 3M Co., said fourth-quarter sales increased 9%, as a revamped electronics business continued to drive growth.

The new federal tax code also took a toll on net income at 3M, which fell 55% in the quarter as the company recorded expenses of $762 million to comply.

The Maplewood, Minn.-based maker of Post-it Notes, Scotch tape and Ace bandages raised its 2018 profit forecast on the expectation of lower U.S. income taxes to a range of $10.20 to $10.70 a share, up from $9.60 to $10 a share.

Shares of 3M rose 2.71% and were trading at $254.33.

3M's performance has improved after years of lackluster sales growth, as a result of renewed focus on its electronics-and-energy business, whose customers include makers of semiconductors, data centers, automotive electrification and energy grids.

"These investments are paying off." Chief Executive Inge Thulin said Thursday. "Going into 2018, we will increase investments further."

Demand for 3M's products have been aided by expanding industrial activity globally and strong sales growth overseas, particularly in Asia.

Fourth-quarter sales from the electronics-and-energy unit climbed 12.5% to $1.3 billion. The safety-and-graphics business -- which supplies granules for roofing shingles, traffic safety materials and personal safety gear -- reported a 15% increase in sales to $1.5 billion, driven by construction activity to repair hurricane damage in the southern U.S. "That is our next breakout business," Mr. Thulin said.

Overall for the fourth quarter, 3M earned $523 million, or 85 cents a share, compared with $1.15 billion, or $1.88 a share, a year earlier.

Caterpillar, for its part, said 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.

Austen Hufford contributed to this article.

(END) Dow Jones Newswires

January 25, 2018 12:24 ET (17:24 GMT)

Caterpillar (NYSE:CAT)
Historical Stock Chart
Von Jun 2024 bis Jul 2024

Caterpillar (NYSE:CAT)
Historical Stock Chart
Von Jul 2023 bis Jul 2024