The Rising Influence of Rising Affluence

[DewDiligence]

CAT has as many lives as a cat:

https://www.wsj.com/articles/caterpillar-sees-signs-of-recovery-1493122210

In recent quarters, CAT reported awful earnings and the stock rose anyhow; yesterday, CAT reported “blowout” 1Q17 earnings (but see below) and the stock soared 8% to a 3.5-year high.

I’m skeptical of the huge “beat” in CAT’s 1Q17 non-GAAP EPS, which excludes a large carve-out for “restructuring” costs. CAT has done so much cost-cutting that it will soon encounter higher costs if the recovery in its businesses has any staying power.

CAT raised 2017 sales guidance to $38-41B (from the prior range of $36-39B); 2016 sales were $38.5B, so the new guidance range for 2017 represents YoY growth of -1% to +6%.