Caterpillar reported record Q4 and 2006 results, but missed analysts' average estimate on the quarter for net income. However, Street beating revenue guidance for '07 seems to be compelling investors to buy CAT in pre-market trading, despite a disappointing net income forecast. Q4 net income rose 4% to $882 million, or $1.32/share on 14% revenue growth to $11b, compared to analysts' expectations of $1.34 to $1.35, on sales of $10.5b. Net income for '07 is seen between $5.20 to $5.70/share on flat to 5% higher sales of $41.5b to $43.6b. Analysts expected $5.54/share and $41.06b. CAT's net income for 2006 increased 28% to $3.54b on sales of $41.52b (+14%). In pre-market trading CAT's shares are up about 2%, last trading at $60.85, compared to its close yesterday of $59.63.
• Sources: Earnings press release, Bloomberg, MarketWatch
• Related commentary: Jim Cramer's Picks on Wall Street Confidential, Jan. 4, Jim Cramer's Take on CAT, Novartis and Caterpillar: When to Hold 'Em, When to Fold 'Em
• Potentially impacted stocks and ETFs: Caterpillar (CAT). ETFs: DIAMONDS Trust, Series 1 (DIA), Industrial Select Sector SPDR (XLI), PowerShares Dyn Building & Construction (PKB), iShares Dow Jones US Industrial (IYJ)
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