Caterpillar ( CAT) bulldozed fears on Wall Street that the slumping housing market would cause it to lower its forecast for 2007. The Peoria, Ill., construction equipment maker said its fourth-quarter profits rose 4.3%, falling just short of Wall Street's expectations, but its revenue jumped by 14%, beating estimates. Caterpillar also reiterated its previous forecast for 2007, calling for profits to be flat to up 10% and revenue to be flat to up 5%. The forecast predicts a steep slowdown from the strong growth that Caterpillar has enjoyed in recent years due to weakness in the U.S. housing market and lower demand for truck engines, but the company expects gains from overseas markets and domestic mining and oil and gas markets to buoy its performance. "The fact that they're not expecting declines, that's pretty good, especially since half their business are U.S.-based," says Morningstar analyst John Kearney. "Europe seems to be finally getting some traction now after seven years of doing nothing. International business is going to prop up Caterpillar as a whole." In October, Caterpillar slashed its 2007 earnings forecast as part of its third-quarter report, sending its shares tumbling. Recent economic data showing continued weakness in the housing market rattled the stock market on Thursday and fueled speculation that Caterpillar would again ratchet back its expectations. But with the speculation proved wrong, its shares were recently trading up $1.27, or 2.1%, to $60.90.