Eaton Corporation PLC (NYSE:ETN) issued the expected impact of the newly-signed U.S. tax legislation on company. It should be noted that last month, the Tax Cuts and Jobs Act was signed into law, considerably modifying U.S. corporate tax law.
For Q4 2017, Eaton Corporation projects the TCJA to lead in a one-time tax cost of between $90 million and $110 million. Around 50% of this expense is linked to remeasurement of U.S. deferred tax sums and the other half is linked to taxation of unremitted income of non-U.S. subsidiary firms owned indirectly or directly by U.S. subsidiaries of Eaton Corporation. This taxation will be compensated over 8 years, as needed by the TCJA. The above projection is preliminary, as the exact cost in the fourth quarter can just be decided once fourth quarter plans have been concluded.
For this year, Eaton projects that its effective tax rate, discounting in the impact of the TCJA, will come between 14% to 16%, which exhibits a jump of 3% points over its previous projection of 11% to 13% before the impact of the Tax Cuts and Jobs Act.
Eaton will offer further details on the TCJA impact when it reports earnings for Q4 2017. The company will report fourth quarter 2017 financial statement on February 1, 2018, before the market open. It will host a conference call that day to discuss Q4 2017 earnings report and its guidance for FY2018 earnings with institutional investors and securities analysts.
Eaton Corporation marks as a power management firm with 2016 sales of $19.7 billion. The company offer energy-efficient solutions that assist their consumers effectively manage hydraulic, mechanical and electrical power more efficiently, sustainably and safely. It is committed to enhancing the environment and the quality of life through the application of power management services and technologies.