“It looks like there was a lot of pre-buy in the marketplace in the fourth quarter in a lot of industries, especially construction equipment, so the $9.25 that they’re guiding to for 2012 is a midpoint,” he said. “Where around that number you’ll be is a function of how much pre-buy there was and whether the U.S. really has a 3-percent GDP number which is part of their forecast.”
Lustgarten added that he thought the company would “go to the $8 to $10 range — no problem.”
Caterpillar also plans to increase its capital expenditures to about $4 billion in 2012, an increase from $2.6 billion in 2011.
Lustgarten emphasized that Caterpillar is managed for the long-term, and that it takes multiple years for the company to increase capacity.
“That spending is a long-term investment and is not dependent on where the numbers turn out to be this year or next year,” he said.
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Eli Lustgarten does not own Caterpillar stock and has no investment banking conflicts with the company.