cheap is going to affect the value and dividends at annaly? >> i think it's very positive for annaly. it was up 17 cents today. it's a great company. i also want to extend my best wishes to mike farrell and his family. mike, there's a release that came out today. he's got cancer, it's treatable, he'll work on a normal schedule. mike, get better real fast. i know you're going to. mike has created the single best financial real estate investment trust if our lifetime and i know he's going to continue to make you money. i'd stay with the stock. fantasy versus reality, politics versus the companies. please don't listen to the wrong people. america is roaring back. listen to caterpillar, listen to union pacific. don't listen to the political parties. "mad money" will be right back. >> coming up, the waiting game? this industrial giant's big bets overseas aren't paying off just

yet. but after a reporting of this, etn boosted their dividends this morning. cramer's earning exclusive with the company's ceo is next. and later, prognosis for profits. all this week, cramer is unveiling his medical [ through stocks that could be set to break out. tonight a company helping fight chronic debilitating diseases. could it be the best medicine for your portfolio? plus tech turbulence. as pc dominance declines, apple's devices seem to be taking over. do companies outside the ecosystem is a fighting chance? cramer's taking the pulse with the ceo of havnet fresh off their earnings release.

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i have some good news and some bad news. which do you want first? eaton corporation, it happens to be a stock owned by my charitable trust. eaton reported this morning. while headline numbers and guidance were perceived to be disappointed, the companies posted a 3% earnings miss, there was also a lot of positives buried within the quarter, not to mention a glorious 12% dividend boost means they're paving a way for things to get better. what do you when a company you like, you own, reports mixed results? truly mixed with real positives and genuine problems. i think you have to do homework.

eaton's international lek trek division was hurt by weakness in europe that might last in a while, as well as softness in china, which could go away if china cuts interest rates. the company's aerospace and hydraulic businesses were in terrific shape. and eaton has a tremendous record of creating value for its shareholders. stock is given you 157% return since i got behind it november 2008. up 11% since the last time we spoke to the ceo. so let's talk to sandy cutler. welcome back to "mad money." >> good evening. good to be with us. >> 6:32 this morning, i'm waiting. i read in the statement you use the word shortfall but then use the two words dividend boost. which is telling the correct story of the quarter? >> we're think we're coming out with all time records sales, up

17%, profits up 44%, full-year profits exceeded our all-time record by 19%, that record we set in 2007. we look at this quarter where we did for the first time in a decade actually miss the consensus number in first call. our confidence, however, about 2012 and having another record year in 2012 in both sales and profits is why we declared the 12% dividend. we think we're in very good shape, we're very confident in our overall business. we did see some weakness, you correctly noted in asia and in china. or in china in europe. i don't think that's unique to eaton. but we see our markets next year expanding by 5% in 2012. that's a solid base to operate off of. >> the shortfall in europe was due to a slowing euro zone economy and i understand china is cutting. do you think europe doing enough to make you feel it is a

temporary situation? >> our view on going back to europe in the third quarter is we thought we'd see them in recession in the fourth quarter of 2011 and first quarter of 2012 beep think that will extend out into the second quarter of 2012. we edge courancouraged by the m to strengthen the banking structure. we're have to see the overall fiscal reform to occur to get those deficits down. our view is that we come out of a fairly shallow recession in europe and start to see some stabilization in the second half. that's what's in our forecast. >> get all the stuff in the table. brazil. you talked about a market a little bit weaker in brazil bufl we often think of the brazilian market as one that is resilient. do you see a comeback in brazil in the prebuy problem, in truck sfs. >> what did we see in brazil and china? both in 2010 were dealing with

very big inflationary pressures. they've increased interest rates and slowed those economies down. we saw the brazilian economy slowing through the third quarter. it looked better in the data in november and december. but the prebuy in truck was probably down about 5% in brazil from 2011, we see the ag market is up about 5. still growing but slower growth. >> how are you able to have a 15.1% fourth quarter segment operating margin despite top line head winds? >> we had record sales volumes here in the fourth quarter. wliem we didn't get all the sales we would have hoped by about 200 million, we really had a terrific quarter, sales up some 10%, profits up some 27%. that's really a very good operating quarter. we look what's happening, some of these markets have real exciting drivers for 2012. nonresidential construction coming back in the u.s.

. we saw it go quite positive in the fourth quarter. it may grow on the order of 5% next year. commercial aerospace boom, 15% up in that marketplace. going to be offset by a down turn 6 to 7 on the defense side. continued strength in the hydraulics market, particularly here in the u.s. you saw other companies out with great numbers today. retail sales in north america recovering and heavy duty truck we think at 300,000 next year. we have drivers we think we can count on in terms of our growth for 2012. >> i know one of the things that can drive our gross domestic product would be a return i think you're holding in nonresidential construction. it's ahead of pace from where you thought it was going to be? >> we are. we study alone in 2010 when we said by mid year '11 you'll see the market turn and it did turn. you saw numbers up on the order of 6%, 7% in fourth quarter 2011

over 2010. it's starting to broaden, not only in the mining, petrochemical side, now seeing recreational amusement. we carry a very large back log in our electrical business, over $1.2 billion into this year from last year. and we've been booking those orders, and they'll begin to ship during this year. we have a high level of confidence we'll see an improving nonresidential construction market. >> everyone knows i think you guys are the most pro shareholder of almost every company i deal with. a decision to put through a 12% dividend boost is not done lightly, right >> no, it's not. last year in the first quarter we announced 17%. this year 12%. we're committed to this difficult depend policy and committed to a continued dividend stream to our shareholders. we think it a fundamental element of total shareholder return during these uncertain times. >> sandy cutler, thanks so much

for coming on the show. >> thank you. always good to talk to you. >> you get a boost of 12. i think that eaton is a buy. if anyone down grades the stock, i think they haven't done enough homework and hasn't listened to sandy cutler. >> coming up, prognosis for profits. all this week cramer is unveiling his medical [ through stocks that could be set to break out. tonight, a company helping fight chronic debilitating diseases. could it be the best medicine for your portfolio? and later, tech turbulence. as pc dominance declines, apple's devices seem to be taking over. do companies outside the ecosystem have a fighting chance? cramer is taking the pulse with the ceo of havnet pressure off their earnings release.

we love catalysts, events happening down that road that can send stocks higher. hence why i've been highlighting medical breakthrough stocks.

so far merck, bristol and myers. drugs going forward as we get more clinical trials as well approval from the fda. in many ways they're just not like other stocks. i know they throw you off at home, they don't trade on earnings per share estimates. what really matters is the pipeline, the drugs in development that could potentially bring in gigantic profits. that's why bristol myers barely went down today, even though it did report a lousy number. people don't care about the near-term disappointment because they have is a fantastic pipeline of new drugs, which is why i recommended it on tuesday ahead of the quarter. it's a huge buy here, especially with that dividend.

i called bristol myers, i never understood him. finally he said the drug company. anyway, i thought i should clear that up. another one for you tonight. a drug company that should have a breakout year in 2012 thanks to a bunch of pipeline related catalysts, some which could be bigger than wall street thinks. i'm talking about biogen, biig, a global tech firm with a number of products on the horizon, this a is a big pipeline. its main object is treating multiple sclerosis, a horrible cron being disease that attacks, the central nervous system, brain, spinal nerves, optic nerves and can lead to numbness

to symptoms as severe as paralysis and visions. it's a chronic condition and it waxes and wanes. you have four mainstream, all of which have to be injected from b biogen, bayer and others. biogen represents about 60% of the business. the company is developing a new orally delivered therapy for multiple sclerosis that based on the latest data looks like it could be the most effective treatment on the horizon. looks like real breakthrough.

the drug is called bg-12 and seems to be more effective than the leading injectable medications with less severe side effects. they expect to do more phase three studies and file bg-12 with the fda by year end. if they receive fda approval, which seems likely with the data so far, even though it's never a sure thing, they hope to launch the medication by the end of the year. it could possibly rake in $1.5 billion in 2015. that's a couple of years from now. this one drug would substantially grow their business. however, i think wall street's estimates are too low for bg-12. based on what we're hearing from actual doctors, we don't come out here and just read the research, it seems like very likely that this drug will be adopted as what's known as a

first line therapy, which would make it the on first line treatment that you can take orally. all the other have to be injected. the on other oral ms drug out there is main lip used as a second line treatment after others have failed. that's why i think bg-12 could generate at least 2d billion in peak sales for biogen and experts predict it could be a $4 billion or $5 billion drug, totally possible since multiple sclerosis is a $15 billion market. and it would effectively double biogen's revenues from where they are last year. that's huge, not in the estimates and you can only imagine what that would do to a stock. since biogen already has a multiple sclerosis franchise it, would be inexpensive to promote it to doctors. what about the existing ms medications? both of the ms drugs that biogen has on the market, avinex and

ty, the company managed to put through price increases on both drugs last month. generally the people on the drugs stay on them. if it does cannibalize from these two, it would be because it's so wildly successful, it's taking shares from everyone. it could take share thanks to a new test that allow doctors to see whether their patients might be exposed to potential lethal side effects. is that all have i? how about the rest of the pipeline? two drug in stage three development, the last phase before they can be approved. one is an orphan drug for als, it could generate $500 million in sales. the other is a hemophilia drug which made be able to do $3

billion in sales. we'll find out more on both by the end of the year. given the early data, i expect both sets of data to be positive for biogen, two more juicy needle movers of 2012. biogen had a big run up. at the top i said i should have recommended this. this is my bad that i'm in at this point. but you know what, people had written off the company's enough ms drug. they were surprised when the clinical trial data was so good, as i was. i wouldn't worry about where the stock has been going. i wouldn't worry about where the stock has been. only care about where it's going. when you consider the positive catalysts coming this year, along with the fact that the street could be seriously underestimate the potential of the new drug, i think you have a winner. look to biogenidec which could have a breakout 2012. i'd like it even more on a

market inspired pullback. let's go to richard in virginia. richard. >> caller: jim, what's the word on rj invested 10 million in this country and i'm reading they're posed to be the next blockbuster in the world of cancer. >> i got work to do on that. i don't get these questions ahead of time. i'm stumped by richard in virginia and i'd rather say i'm stumped. so i got to come back. let's go to jannine in new york. >> caller: hi, jim. a great big hello from the north country of new york. >> must be snowy up there. >> caller: a little bit. got some left. i'm watching idenix, novartis purchased some stock. is this a good buy and possibly a small biopharma company, a

takeover? >> i don't want to recommend that -- i stand why you want to say it could be a takeover. i think you should own it because i think it going to do well on its own. i don't know if it's going to get taken over. it may not have to be. i do like hep c and i like that stock. i mean, i don't like hep c but i like it's stock.

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it is time for the lightning round. and then the lightning round is over. are you ready? the lightning round. start with brian in california. brian. >> caller: what's up, cramer? big booyah. what's up with nokia? where are they headed? >> they did have good revenue numbers. unit numbers. you know what that means? that means microsoft is doing well. the way to play nokia is microsoft and i am a buyer of microsoft. let's go to tom. >> caller: how are you today? >> good. how are you? >> caller: loving it. tell me how joy global is doing.

>> after listening this morning, not much to the quarter but i think they're going to have a monster quarter. the ceo was saying some monster things to do. >> ron in kentucky. >> caller: booyah, professor cramer. >> thank you for giving me tenure, always wanted it. >> caller: calling from kentucky. what do you think of potash? >> it tells you i was wrong to be worried. i think this is not right and this is buy, buy, buy. let's go to jonathan in california. >> caller: booyah to you. >> that's all fired up to you. >> caller: i've had disney stock for a while now. just trying to decide what to do with it. >> you hold on to it. there's no real cast a litalyst.

i think they have to do a little refresh on the theme parks but it's a good one, you hold on to it. >> northern michigan, jimmy. >> caller: booyah to you. >> it's beautiful up there. >> caller: talk to me about jet blue. >> ceo has a good story, everyone likes the airlines except for me. i can't tell you to get in them because then i got to get you out of them and i can't. life's too short. let's go to gary in new york. >> caller: forget about it, booyah to you, jim. liberty media. >> i'll see you a liberty and raise you a time warner. i think that's a better buy, get a little more diversification and i like the management and the margins. let's go to tay in colorado. >> caller: booyah from denver, colorado. >> say hello to tim for me. >> caller: my call is about

mastercard. recently it had a pullback of about 10% but it seems like it's having a lot of resistance. i wasn't sure if it was time to sell before earnings came out. >> i don't think you have to. i think it's going to have another good year in 2012. gary in missouri, please. gary. >> caller: yes, how are you? >>. >> real good there. how's big mo doing? >> caller: good, good. got a question for you. what are your thoughts on staples? >> oh, the company that created all the jobs? i think they're good. you want to talk retail, jcpenney. i wish they hadn't been so bullish. jcpenney, i am saying sell, sell, sell. and that, ladies and gentlemen, is the conclusion. we'll buy jcpenney lower, don't worry. that is my conclusion of the lightning round! take the privild investing tools of wall street

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which gels to remove unsexy waste and reduce cholesterol. taking psyllium fiber won't make you a model but you should feel a little more super. metamucil. down with cholesterol. there are some companies you just have to listen to. not merely to see how their own business is doing but because they can give you a terrific

read on their industry. i'm talking about a company like avnet, avt. i like to think of it as the largest supermarket for tech on earth. at my old hedge fund i always viewed avnet as the best way to take the temperature of all things net. i'm happy to say avnet is every bit as accurate today as it was then. a month and a half ago when intel was posting disappointing number, avnet's ceo told us despite what intel said, they were seeing signs of stabilization, totally against the grain. one week later the semiconductor bought them and has not looked back since rahal eeg 20%. once again avnet nailed it. this may be one of the biggest calls we've ever had in terms of "mad money."

the stock went down falling 23 cents. avnet has given you a 32% gain since our first interview with the ceo. this company has been so consistently accurate in its forecast. let's talk to the ceo to dig deeper. welcome back to "mad money." >> hello, jim. glad to be here. >> when you were here last you said the industry correction nearing an end, you said it happened with an jup tick and everyone else disagreed and so woe is me. you're sticking by that. >> eewe were very pleased the w the quarter came in. we'll share what we see in the spirit of the brad based customer base we represent. >> i'm trying to figure out how europe is weak. had you a level of profitability

in europe that was extraordinary. how does that happen? >> the real big pickup was in our computer business in europe. it's been below long-range targets for quite a while. we stressed we were going to build that up. they were up 36 sequentially when you adjust for currency and deliver nice profitability and pleased to say. >> i thought that was a standout. you've got numbers i'm trying to get my arms around they're so good. stand alone server and software up 35%, storage up 20%. these must be gigantic secular themes to hit those numbers. >> i think this goes on with your themes with the cloud in data. we play across two of them with semis and data center. >> it's remarkable. i've been critical that i've been saying only novelis is

doing a buyback. your buyback, how have you been able to nail it like that? most companies i see the buyback stock, they screw it up! >> i think i told you back in august that we were prompted by the fact that that valuation was so much hanging around our book value. through the december quarter, the total amount of acquiring we've done as been at $28 a share, just slightly above the book overall. we think that's a good investment, particularly where we stand today. >> how much of what happened because you were very candid, you had a lot of drives in the system when we had the terrible thai flooding which then shut down a lot of drive capacity. i'm sure a lot of that excess which was pure profit for you is gone. going forward are we going to see good numbers in disk drives? >> it's tbd going forward. for the september quarter i

think we attributed the hdd benefit to 5% of that up side you talked about. outside of the hdd benefit, there was really solid execution that was going to beat the numbers, even if we didn't have that benefit. >> how about flash? everyone is looking at sandisk down big. they were not that positive going forward. what do you see for flash? >> so it's not a big part of our business overall but we do work with the nano flash in a goes into industrial designs. it's becoming a preferred storage component as opposed to those industrial solutions. >> i thought it was a great secular theme. we also talk a lot about the apple world and the non-am world. a lot of companies that sell into non-apple are struggling. are we at the point where apple is so powerful that a lot of your customers that aren't apple are feeling a pinch? >> jim, the broad base of

customer we serve, we don't have any particular exposure on one particular segment. the health of that broad customer base is in aggregate doing pretty well. certainly not as good as apple is doing these days but every hundred thousand of those devices that get sold creates the need for more infrastructure and more circumstances that create good circumstances for us. >> now asia seems particularly strong, just right here, right now, very strong, right. >> right. >> i mean just -- >> for our overall business, americas and asia both showing strength, europe relatively weaker. we've had sequential declines two quarters in a row in europe. >> i want people to understand who your hundred thousand customers. when people talk about these customers, how many of our viewers would actually know the names of of the companies or is it really -- i'm just trying to explain because everybody says,

jim, you say avnet is so important, i've never bought anything from avnet. >> the components we distribute go to a very broad base of electronic manufacturing and oem companies with industrial products, many that aren't household names. but when you think of devices like gps or kiosk, digital signage, a lot of the content for those products somehow may have touched and flowed through an avnet value ad or service and facility. >> that buy back was sweet. you've done well for shareholders. rick hamada, thank you very much for coming on the show. >> thank you, jim. >> he touches a hundred thousand customers in many different ways, in many different parts of the chain. and even europe was good for them. it wasn't just because of thai flooding. across the board tech is strong. why? cloud. why? big data.

these themes aren't going away. they touch a lot of different tech companies, not just apple. >> coming up, netflix surged today after reporting a blowout quarter. but could there be a different online video vendor to keep your eye on? we're in the final stretch. but there's more to come as cramer leads the pack in the final no-huddle offense. [ male announcer ] how do you trade? with scottrader streaming quotes, any way you want. fully customize it for your trading process -- from thought to trade, on every screen.

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netflix has become the ultimate battleground from the shorts and the longs. sometimes you have to step away or you'll get torn to pieces. the ceo made a big mistake when he announced the new pricing plan and tried to split the company between streaming and dvd. but he's adjusted. he's big enough to fix the error. he's now winning back customers. while he realizes dvd is ultimately going the way of dial-up internet, it's not enough reason to split it from the company. hastings probably has a better handle on what customers want in this new age and realizes people want to watch content when they want it and saw the value in making subscribers feeling like they were part of a club. but he hurt people. and he's -- the makers of video

have become wise. hastings made it clear in a funny moment in the call where he says the average household watches eight hours of tv a day and the average investor doesn't come anywhere near there. starting with total and complete and utter cramer fav, steven van zant. i bet that's going to be a big hit. he said a streaming customer is worth much more than a dvd customer thanks to the minimal cost of servicing the subscriber. all great insights. what do you do with the stocks? if you really believe netflix is coming back, i think you should buy time warner.

i think the stephen vietnan zan meant to be like hbo. i know you might be thinking cramer's punting, not offering any direction on netflix, just suggesting you buy something else entirely. sometimes you got to just stay on the sidelines. there are so many people wanting to play this from the short and long sides, so many cross currents, it's not worth it to try to predict the next two points, never mind the next 20 netflix, still love it. the stock, just too hard for this guy. [ nadine ] buzzzz, bzzzz, bzzzz, bzzzz,

you know, typical alarm clock. i am so glad to get rid of it. just to be able to wake up in the morning on your own. that's a big accomplishment to me. i don't know how much money i need. but i know that whatever i have that's what i'm going to live within. ♪ ♪

laces? really? slip-on's the way to go. more people do that, security would be like -- there's no charge for the bag. thanks. i know a quiet little place where we can get some work done. there's a three-prong plug.

i have club passes. [ male announcer ] now there's a mileage card that offers special perks on united, like a free checked bag, united club passes, and priority boarding. thanks. ♪ okay. what's your secret? ♪ [ male announcer ] the new united mileageplus explorer card. get it and you're in. this isn't camelot. there's no legal limit to the amount of downside. we can go down for a couple days but i don't think it's going to be anything big. why? because america is coming back. it's caterpillar talking, union pacific talking, eaton talking. those guys, they know what they're doing, they're not fooling and and i'm taking my queue from them, not from the gop, not from the democrats and not from ben bernanke. i'm jim cramer, i'll see you tomorrow!