Caterpillar cheery on 2018 outlook despite Q4 loss
New York (AFP)
Improving industrial demand lifted Caterpillar's sales and boosted the 2018 outlook even as the company on Thursday reported a fourth-quarter loss due to massive one-time charges connected to the US tax reform.
Caterpillar, which sells heavy manufacturing equipment to the mining, oil and construction industries, reported a loss of $1.3 billion in the quarter ended December 31, slightly more than the $1.2 billion loss in the same period of the prior year.
The loss was due to $2.4 billion in charges attributed to provisions in the US tax reform on deferred taxes and the repatriation of non-US profits.
But the firm saw revenues jump nearly 35 percent to $12.9 billion, with all three of its businesses gaining.
The company highlighted much-improved industrial demand after a lengthy slump hit its business, especially mining. Annual profits were $754 million, recovering from a loss of $67 million in 2016.
"After four challenging years, many key markets improved in 2017, and our global team delivered strong results," said Caterpillar chief executive Jim Umpleby.
Caterpillar offered an upbeat outlook on 2018 based on increased mining investment due to higher commodity prices, strong construction activity in North America in residential, non-residential and infrastructure sectors, and an improving oil and gas market.
"We are in the early stages of implementing our strategy for profitable growth," Umpleby said. "In 2018, we expect to make additional investments in the expanded offerings and services important for Caterpillar's long-term success."
The company was forced to make deep staff cuts during the mining downturn, but added to its workforce last year. Total employment at the end of 2017 was 116,700, up 9.6 percent from a year earlier.
Its share price jumped 3.8 percent to $168.34 in pre-market trading.
© 2018 AFP