Caterpillar (CAT) says overseas economies are still growing fast enough to enable the company to overcome “recessionary” conditions in the U.S. The Peoria, Ill., tractor maker posted a fourth-quarter profit of $975 million, or $1.50 a share, up from the year-ago $882 million, or $1.32 a share. Sales rose 10 percent from a year ago to $12.1 billion. CEO Jim Owens said the company continues to grow according to its plan despite a sharp drop in demand domestically. For 2007, for instance, Caterpillar said engine sales increased 6 percent - despite a 59 percent decline in North American on-highway truck engine sales. Because of solid overseas demand, Owens said Caterpillar continues to expect to post profit growth of 5 percent to 15 percent for 2008, on sales growth of 5 percent to 10 percent. “While we expect anemic growth in the U.S. economy,” Owens said, “we continue to see positive conditions for our sales in most of the rest of the world.” That’s optimistic enough to drive the stock, which has dropped around 10 percent so far this year, up modestly in pre-market trading Friday.

The U.S. consumer pullback has Harley-Davidson (HOG) hitting the brakes. The Milwaukee-based motorcycle maker posted a bigger-than-expected drop in fourth-quarter earnings, as the company trimmed its production schedule to help dealers clear out inventory. Harley made $186 million, or 78 cents a share, for the quarter ended Dec. 31, down from the year-ago $254 million, or 97 cents a share. Revenue fell 8 percent from a year ago to $1.39 billion. Analysts on Wall Street were looking for an 82-cent profit on sales of $1.34 billion. Profit margins fell from year-ago levels, continuing a trend noted by Rich Smith at the Motley Fool.

Harley pledged to continue to monitor demand and possibly trim back the production schedule even further. Still, the company offered a modestly hopeful forecast, predicting a 4 percent to 7 percent gain in 2008 earnings where analysts were looking for no gain. “While these are challenging times in the U.S.,” CEO Jim Ziemer said, “our international dealer network delivered double digit retail sales growth in the fourth quarter and for the full year of 2007.” Investors will be hoping for a repeat of that performance if Harley is to hit its modest targets in 2008.