Caterpillar (Symbol: CAT) has had a nice run over the past year, but its 2Q earnings, which were reported Friday morning, were down 21%, and that sent share prices lower.

Despite a rise in revenue of 7%, earnings sill dropped. The company is citing a weak North American market and higher operating costs—a common theme these days.

Caterpillar posted earnings per share of $1.24, which was 28 cents per share lower than the same period last year and below the expectations of $1.42 - $1.54 per share.

CAT closed at $83.20 on Friday—a drop of $3.78 (4.35%) per share. The stock is continuing to decline slightly in after-hours trading.

What will happen after investors have had the weekend to evaluate Caterpillar? Are we likely to see CAT come down to the $70s?

Despite the weak North American market and missed earnings, I think Caterpillar will rebound nicely. They have great rest-of-world exposure and factors that led to the earnings dip appear to be isolated incidents—such as a supplier declaring bankruptcy.

According to David Burritt, Caterpillar’s CFO, earnings were hurt by higher-than-expected material costs and manufacturing hiccups when the company started shifting into a just-in-time delivery system.

Burritt also acknowledged that tighter economic controls were needed.

“We need to tighten our belts,” Burritt said.

If you’re looking to take up a position in Caterpillar or add to one, now is the time to start looking. The stock pulled back almost 5% on this news and might come down some more, which would create a great entry point.

Shares of CAT had dipped briefly into the $70s ($78.26) during intraday trading before rebounding back up to close at $83.20.