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Shares of Caterpillar were last down 7.7% to $80.31 in pre-market trading, on news of a 21% decline in Q2 net income to $823m, or $1.24/share, missing analysts' average estimate of $1.49/share. Revenues rose 7.1% to $11.36b, beating analysts' forecast of $11.1b. "Disappointing earnings in the second quarter were attributable to the sharp negative swing in on-highway truck engine profitability, weakness in North American machine sales, continued selected supply chain disruptions and higher material costs," said CEO Jim Owens. However, Caterpillar is maintaining its full year guidance for EPS of $5.30 - $5.80, compared to $5.17 in 2006 and analysts' average estimate of $5.59. Caterpillar gained 0.9% to $86.98 on Thursday.

Sources: CAT-EarningsChart-7-20-2007 Press release, Bloomberg, MarketWatch
Commentary: Dow Component Performance and Impact On Overall Index GainsCAT, GOOG, AAPL Sporting Consecutive Day Gains Heading Into EarningsCaterpillar Earnings Conference Call Transcript (later today)
Stocks/ETFs to watch: Caterpillar Inc. (NYSE:CAT). Competitors: CNH Global NV (NYSE:CNH), Komatsu (OTCPK:KMTUY), Volvo AB (VOLV). ETFs: DIAMONDS Trust, Series 1 (NYSEARCA:DIA), Industrial Select Sector SPDR (NYSEARCA:XLI), PowerShares Dyn Building & Construction (NYSEARCA:PKB), iShares Dow Jones US Industrial (NYSEARCA:IYJ)

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Source: Caterpillar Down 7% on Miss, Maintains Full Year Guidance