Sunday, April 24, 2016

Caterpillar - Sad News For The Gold Bugs

On April 22, 2016 Caterpillar released its 1Q 2016 financial report. Caterpillar is a very important company for the resource industry because the equipment, made by this global giant, supports mining operations all over the world.

Similarly to my previous post on Caterpillar, I cannot spot any positives in its results, which could support a bullish thesis on the precious metals sector.

Revenues and operating profit, delivered by Caterpillar's Resource Segment, were really bad in 1Q 2016:

                                     source: Simple Digressions

As the chart shows, in 1Q 2016 revenue fell once again and was 26.5% lower than in 1Q 2015. 
What is more, this fall was caused mainly by a $463 million decrease in the company's sales:

                                             source: Caterpillar 

Operating profit was following revenue:

                            source: Simple Digressions

Well, Caterpillar's performance is definitely not supportive for the gold bulls...


  1. Don't bull markets in commodities begin after there has been a prolonged decrease in mining activity. Caterpillar's results are to be expected at this time. It will take a year or two of gold going up before we see increase mining activity.

  2. A case for bull market is made when fundamentals look most depressing For all we know this could be a turn of fortune for Caterpillar revenues going forward