Caterpillar Builds Another Mammoth Quarter

Caterpillar Inc. (NYSE: CAT) reported a huge earnings and revenue beat on Thursday morning, sending shares of the stock higher by more than 3 percent in the pre-market trading session.

Caterpillar reported adjusted fourth-quarter earnings per share of $2.16 on revenue of $12.9 billion. Both numbers far exceeded consensus analyst estimates of $1.79 and $11.9 billion, respectively. EPS was up 160 percent from the same quarter a year ago, and revenue was up 35 percent.

Full-year 2017 adjusted EPS was $2.16. Caterpillar took a one-time charge of $2.4 billion, or $3.91 per share, in the fourth quarter due to new tax laws.

Caterpillar also guided for adjusted 2018 EPS ranging between $8.25 and $9.25, excluding restructuring costs of about $400 million. Wall Street analysts had been expecting 2018 EPS of $8.15.

Caterpillar’s business and stock had struggled for several years, but the company got back on track in 2017 and appears to be headed into 2018 with tremendous bullish momentum. Caterpillar stock is up more than 74 percent in the past year, second best of any stock in the Dow Jones industrial average.

“After four challenging years, many key markets improved in 2017, and our global team delivered strong results,” CEO Jim Umpleby says in a statement. “In 2018, we expect to make additional investments in the expanded offerings and services important for Caterpillar’s long-term success.”

Caterpillar anticipates strength in nearly all of its major markets in 2018. The company expects improvements in North American residential, non-residential and infrastructure construction. It also says rising commodity prices and economic expansion will drive mining growth, and that oil and gas-related applications should increase in 2018.

On Wednesday, Bank of America analyst Ross Gilardi said the North American construction market has once again turned into a cash cow for Caterpillar.

“We have been anticipating this inflection in growth for some time, based on Deere’s (DE) construction retail sales, robust truck orders and our bullish dealer survey,” Gilardi says. “We believe…

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