As Caterpillar's stock hits multi year highs, its operations continue to sink.

With sellside firms suggesting that CAT should be valued on 2018, and in some case 2019 results, Caterpillar shareholders have been happy to comply with the recent euphoria, sending the stock soaring 18% since the Trump presidential victory, and back to multi-year highs on hopes a Trump's infrastructure push would make excavators great again, coupled with expectations that an infrastructure push out of China will result in a rebound in the company's profits. For now, however, operational woes at the heavy industrial manufacturer continue, with yet another month of declining global sales.

To be sure, there was a glimmer of hope for CAT out of Asia, where retail sales continued the rebound after posting positive gains in the prior five month, surging 26% in January, the biggest annual gain since July 2012. This however was offset by continuing declines in North America, the EAME and Latin America regions, which declined by 8%, 13%, and 29%, although all regions posted a modest rebound from December Y/Y numbers.

However, as has been the case for the past 4 years, it was on a global blended basis, where the headwinds facing CAT refuse to go away, and after the latest, January, decline in retail sales of -8%, we find that the company has not reported a single monthly uptick in sales for record 50 consecutive months, starting in December 2012, a period which is now 2.5x longer than the far more acute 19 month drop observed during the post-financial crisis period.

Source: Caterpillar