Caterpillar: America will have to wait until 2018 for Trump's infrastructure plans to unfold

Industrial giant Caterpillar (CAT) is one of the US companies most likely to benefit from a big infrastructure package coming out of Washington, D.C.

But right now, the company, like most of corporate America, knows it is stuck in a holding pattern.

“Prospects for tax reform and an infrastructure spending bill in the United States are encouraging,” the company said in its fourth quarter earnings release out Thursday morning.

“While these initiatives would likely be a solid positive for many of our businesses, we would not expect to begin to see meaningful effects of these changes until sometime in 2018.”

Following Donald Trump’s surprise election win, markets rallied as investors saw the prospects for lower corporate taxes and a big infrastructure package as positives for American business.

In the last couple days, markets have taken Trump’s signing of executive orders related to both pipeline projects and the building of a border wall between the US and Mexico as positive signs of his desire to push through some of his campaign promises.

On Wednesday, the Dow cracked the 20,000 mark for the first time, leading, predictably, to new questions about whether any market-based gains related to Trump’s economic initiatives have been pulled forward or simply viewed too positively.

And while Caterpillar does not have a view on whether current stock prices reflect any future fundamental reality as the Trump administration unfolds, the company knows any real changes to its business coming out of Washington are going to take some time to play out.

Elsewhere in the company’s earnings report, Caterpillar CEO Jim Umpleby said the results, “continued to reflect pressure in many of our end markets from weak economic conditions around much of the world.”

The company reported adjusted earnings per share in the fourth of $0.83 on revenue of $9.57 billion. Wall Street analysts were looking for earnings per share of $0.66 on revenue of $9.8 billion, according to estimates from Bloomberg.

For the full year, Caterpillar reported revenues of $38.5 billion, down 18% from 2015.

Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland

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