What to Watch For in Caterpillar’s Q1
Caterpillar is set to report its first-quarter financial results before the markets open on Tuesday.
Caterpillar Inc. (NYSE: CAT) is set to report its first-quarter financial results before the markets open on Tuesday. The consensus estimates are $2.08 in earnings per share (EPS) on $11.98 billion in revenue. In the same period of last year, the company said it had $1.28 in EPS and $9.82 billion in revenue.
Caterpillar benefited from a better global economy last year. Machinery orders rose, and the company got somewhat of a further boost from the recent changes to U.S. tax laws. Because U.S. companies can now expense certain capital purchases and a proposal to spend big on the nation’s infrastructure is reportedly on its way from the president’s desk, Caterpillar’s outlook for 2018 remains generally bright.
But the company remains involved in a major dispute with the U.S. Internal Revenue Service over how it accounts for overseas profits. The company runs virtually all sales and profits through a Swiss subsidiary and pays an effective tax rate as low as 4%, according to a report in The Wall Street Journal.
The company took a $2.37 billion charge in the fourth quarter related to the recent change in U.S. tax law. Of the total, $596 million was attributed to a change in the value of deferred tax assets and the remainder related to repatriating overseas cash.
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With that out of the way, we can expect a strong first quarter.
Excluding Monday’s move, Caterpillar has vastly outperformed the markets in the past 52 weeks, with its stock up 62%. However, in just 2018 alone, the stock is down nearly 3%.
Shares of Caterpillar were last seen up about 1% at $154.95, with a consensus analyst price target of $178.26 and a 52-week range of $95.80 to $173.24. The stock has a dividend yield of 2.1% and a market cap of $92.8 billion.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
