Caterpillar came in with a huge upside surprise on its earnings today.
And that has people worried.
How on earth is it possible that domestic sales of construction equipment could have increased 92 percent?
Construction is recovering—but it is not anywhere near the level that could justify that kind of spending on equipment.
This shouldn’t really be a boom time for Caterpillar.
Even Caterpillar’s executives seem surprised. According to Caterpillar, rental dealers have rapidly increased their buying to replace aging equipment. This is essentially how Caterpillar’s competitors also explain their rising sales.
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