U.S. Machinery Makers Eye Bumper Earnings For Now, But Inventory Glut Looms

By Bianca Flowers | Reuters.com U.S. equipment makers are likely to face excess inventory early next year as demand from farmers and construction companies cools, though second-quarter profit is expected to remain strong. Equipment dealers have struggled to keep tractors and combines in stock due to strong demand and supply-chain snarls that have kept prices high and orders on backlog. They may soon face the opposite problem of having too much inventory as demand eases just as production picks up, industry experts said. “We’re watching this closely because we don’t want to get ourselves to where there’s an oversupply,” said John Schmeiser, COO of North American Equipment Dealers Association (NAEDA), a trade group that represents independent dealers. Machinery sitting idle on dealer lots could jeopardize manufacturers’ margins next year. In recent quarters, heavy equipment manufacturers including Deere & Co and Caterpillar have handily beaten Wall Street earnings. READ FULL ARTICLE >>