Caterpillar Asia Sales Crater By 30% - Company Reports Weakest Stretch Of Global Demand Since Lehman Collapse

Tyler Durden's picture

The chart below, showing CAT latest monthly retail sales for the month of May and broken down by region as well as consolidated for the entire world, paints a vastly different picture than that presented by the company's stock price.

The highlights: US retail sales, up 14% in May, were a modest increase from the 12% increase in April. However, the bounce is from a base of a -16% tumble reported a year ago. Still, the US was the only bright spot on a very dreary landscape as the rest of the world continues to slide. In fact, while both the EAME and Latin America region posted their third consecutive month of 20%+ declines (-22% for EAME, -23% for Latin America), it was Asia (read China) where CAT sales have createred, and the -30% plunge in annual retail sales means Chinese demand for industrial equipment is the weakest it has been since the Lehman collapse.

Consolidated, CAT retail sales for the entire world declined by 12%, virutally unchanged from last month's 13% drop, which was the biggest also since Lehman, and represents 18 continuous months of declining annual sales.

So why does CAT stock continue to reach for all time highs? One word explanation: buybacks.

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NoDebt's picture

Beating expectations ALL the way down.

Headbanger's picture

Quick everybody!  Max out your HELOC to build a new in ground pool!

Oh regional Indian's picture

They, CAT that is, is crawling all over India, helping build Humant Hills called, get this oxymoron.... Apart-ment Communities"....Hah!

Anyways, They have a ton of lease-financed machines out there, tens of thousands....and in India, defaulters have to watch for their knee caps....

They are doing well here. Even GM is doing well in India....


gh0atrider's picture

Real world construction does not matter.  We are living in a virtual world and gh0at is a virtual girl.

COSMOS's picture

They are down because the CHINESE are MAKING their OWN machines.


headhunt's picture

Nothing as profitable as reverse engineering.


RobertC's picture

Ding Ding Ding!!!  GE will soon feel the same regarding thier X-Ray divsion...

thisisjustarandomusernameicreatedforzerohedge's picture

does saying "since Lehman Collapse" instead of just 2010 (lol I thought it was 2008?) make it more bearsh? increase ad revenue by 10%? turn SP future down a few points?


I wonder  how many times "since Lehman Collapse" has been used in an article this year :P seems like you're trying to convince us of something.... not sure what it is.....

thisisjustarandomusernameicreatedforzerohedge's picture

and already have a surplus to boot

if the rate stayed the same because they aren't were depreciated then i'd stop buying CAT too lol


venturen's picture

I think Russia is about to place a Big Order....NOT!

Jumbotron's picture

Just another sign of the slow, but sure collapse to a smaller energy, less Ponzi oriented economy.

There will still be the blowoff top to the Global Utopians do everything in their power including debasing every currency known to man to keep interest payments on the mountain of debt from exploding and to keep the money printing needed to fill the gaping deflation hole that is widening still.  Which of fueling inflation on every thing needed to survive.  Which is killing purchasing power.  Which of course is feeding the slow down.

Death spiral.

just-my-opinion's picture

digg-ity....diggitty.....bury this long till SHTF.....I have 50 on lets play this game for 


Buck Johnson's picture

The same thing may be happening at Cummins (CMI).  Usually if Caterpillar is having issues the rest are also.



The Merovingian's picture

If you dug a hole to China ... oh wait, never mind.  

Hippocratic Oaf's picture

Guess those shovel ready jobs are still on the back burner.

Dr. Engali's picture

Reverse engineering and cheap Chinese knockoffs are a bitch aren't they CAT? 

hugovanderbubble's picture

Big Bullish Signal for Algos and of course for Yellen´s Brain

asteroids's picture

Yellen would call this unfortunate drop "noise". It after all, really doesn't effect the boyz, now does it...

buzzsaw99's picture

whatever you do don't hide out in bonds for the next ten years. the fed sez that would be bad, mkay? [/sarc]

JustObserving's picture

Is Caterpillar blaming it on the weather in Asia?  Or the pollution smog is so thick in China that no one can see well enough to drive? Maybe sales to clear debris in Ukraine and Iraq will make up the difference and more?

NoWayJose's picture

CAT got into installing computers and GPS units in their heavy machinery.  I'm sure China doesn't want the NSA tracking every move made by CAT equipment...

LMLP's picture

How about they reversed engineered all their stuff and make em locally for half the price?

RadioactiveRant's picture

The chinese couldn't design or make anything that wouldn't explode, leak, break half way to its first expected service interval. Those squinty eyed idiots struggle to make a decent kettle.

Penniless Spectator's picture

To paraphrase Wilco, where would we be without wistfull thinking

gdiamond22's picture

That's just 'noise'

highly debtful's picture

I hope they don't do recalls in the heavy equipment business, because that would be adding insult to injury.

Imagine Caterpillar being forced to call back some ten thousand bulldozers.

SmilinJoeFizzion's picture

They need to come up with a clever marketing idea- Like the Chevy Volt


Perhaps an electric powered bulldozer for some green dickhead to build his solar powered treehouse in Vermont

Oh regional Indian's picture

Did you miss their sly transition into a fashion Icon?

One of the biggest stores on one of the most expensive streets in Bangalore is a CAT fashion outlet.

insane world...

Hongcha's picture

This is truly horrific b/c CAT has been touting their Asian Growth story for months/years.

Bearish as hell for Peoria, Illinois, my hometown.  If CAT pulls back significantly in Central Illinois, some prime farmland is going to come up on the block and right quick.  

Peoria would become a little Detroit virtually overnight.  It is barely hanging on.  Peoria is not quite rust belt but has more or less been in a recessionary permafrost since the 1980's.  Typical midwest city ... the downtown imploded in the 1970's and the whites moved North; while the blacks continued to breed undeterred (much of their income is state welfare anyway, so what's the worry?) and have overrun most of the city.

LMLP's picture

First bids the best bid

goldhedge's picture

With the US Gov bailing out the Ukraine don't expect any Gov help in your local any time soon.

Emergency Ward's picture

Obama's 2009 visit to a CAT factory was the kiss of death.

Postal's picture

What could possibly go wrong? /sarc

Cangaroo.TNT's picture

I needs to gets me one of dem front end loaderz to help me pick up smorz CAT stocks.  Buying wit boat hands ain't fas enuf.

ThroxxOfVron's picture

Have they tried offering 0% for 7 or 8 years yet?

Have they re-defined themselves an automobile company or leveraged a nice little bankrupt one and started shoving that inventory onto dealership lots all over North America yet?

Talk to ME, CAT: I will fix everything.  Guaranteed.


disabledvet's picture

You could get a huge spike in steel prices.

Iron ore is one thing (collapsed in price last year) but getting actual processed steel is not cheap.

With coal prices having collapsed and now was with Russia...US Navy heading to Argentina as Italy's "debt collector"...that's a lot of raw material suddenly off the market.

The French have already reopened the steel mill in Youngstown, OH. That thing is gigantic.

Oh regional Indian's picture

Didn't know USN was still using coal fired boilers DV ;-)

Oh, and the Argentina play? See Santandar's role, key.... Italy, Spain and Argentina.....

LaRouche PAC website has a great article on it.


goldhedge's picture


Does not fit todays buy them cheap & throw them away society.


syntaxterror's picture

This has to be bullish. Once the world cup is over, pent up demand will sent CAT thru the roof.

walküre's picture

Are the Chinese flooding the market with their counterfeit copies of CATs?

goldhedge's picture

No. They just build affordable models which do the job...just.


walküre's picture

But they're taking market share is my point. That should be considered. AA results are more telling.

dobermangang's picture

The problem is the Chinese stopped building "ghost cities". 

Lots and lots and lots of empty houses in China too.

walküre's picture

The biggest CAT sales are for mining equipment. One look at Copper prices is all you need.

Gold is taking off, finally.

The beginning of the end, finally.

Wealth is piling into the only thing they know to hold value during and after the reset.

Squid Viscous's picture

should be good for another couple bux in CAT, higher probabilty of more buybacks, that's all that really matters...?

NotAMathWhiz's picture

Don't worry, they will pick up again when we all need front loaders to carry enough dollars to the store to buy a carton of milk.

dobermangang's picture

I'm bullish on those double wheel wheelbarrows.  It will be the new functional wallet.

atomp's picture

Cat sales crater... but, Volvo sales have been going up.

Don't panic, Cat sales will pick up with The BTFWWIII, US Gov. is the only entity that can "afford" their gear.