* ITW, Parker, Eaton, Paccar beat forecasts
* Cost cuts, international markets support profits
* Shares mostly higher
By Nick Zieminski
NEW YORK, April 20 International markets like
China and Brazil drove profits at U.S. industrial companies in
the first quarter, many of which beat Wall Street estimates and
raised their full-year forecasts.
Cost cuts introduced during the downturn also helped boost
earnings as higher margins helped U.S. manufacturers make the
most of otherwise modest sales increases.
Companies beating analyst estimates on Tuesday included
Illinois Tool Works Inc (ITW.N), Eaton Corp (ETN.N) and Parker
Hannifin Corp (PH.N) -- all of them diversified industrial
manufacturers with broad geographic exposure. Also beating
estimates were truck maker Paccar Inc (PCAR.O) and electronic
component maker Amphenol Corp (APH.N).
ITW raised its full-year earnings outlook, saying it was
encouraged by the ongoing improvement in many of its global
markets. The raised forecast came as ITW reported diluted
income per share from continuing operations of $294 million, or
58 cents a share, compared with a loss of $8.1 million, or 2
cents a share last year. [ID:nN19233225]
Eaton, a maker of hydraulic and electrical control systems
and truck transmissions, reported net earnings of $155 million,
or 91 cents per share, compared with a loss of $50 million, or
30 cents per share a year earlier. Earnings excluding a charge
for U.S. health reform were $1.05 per share, above Wall Street
consensus estimates of 83 cents per share, according to Thomson
Reuters I/B/E/S. [ID:nN20249676]
"We are seeing the strongest growth in Asia and Brazil,
while many U.S. markets are starting to accelerate and Europe
is recovering more modestly," Eaton Chief Executive Sandy
Cutler said. Eaton noted strength in its truck segment, which
posted 55 percent sales growth in the quarter.
Stronger truck sales in North America also helped profit at
Paccar, which also saw better performance at its in-house
finance unit. [ID:nN19207335]
Parker Hannifin's profit was supported by demand for its
climate and industrial control products and international
sales, and the company raised its full-year forecast above Wall
Street estimates. The company also said orders were up 23
percent, providing evidence that the global economic recovery
is sustainable. [ID:nN20250129]
"A global recovery is in effect under way," Parker CEO Don
Washkewicz told analysts on the company's conference call.
Order improvement is being seen in all regions around the
world. March orders were especially strong."
Parker noted, however, that Europe was recovering at a
slower pace than markets in North America, Asia or Latin
America. Washkewicz cited a recent purchasing managers' index,
which in North America has risen for eight consecutive months.
Construction spending remains "somewhat weak" in markets
outside Asia, he added.
Amphenol, which makes electronic and fiber optic
connectors, noted strength in its information technolgoy, auto
and industrial markets. Its sales and earnings beat Wall Street
forecasts and the company said orders and revenue were up
Late on Monday, Crane Co (CR.N) posted a beat and said
profit would hit the high end of its range for the year. [ID:
Although many U.S. industrials are expected to beat
forecasts this earnings season, the sector still faces a number
of headwinds this year, including higher raw material costs, a
strengthening dollar, and growing concerns that stock
valuations have gotten ahead of economic fundamentals for
cyclical stocks. [ID:nN19213524]
In early trading, ITW and Parker shares each gained 2.8
percent, Eaton was up 2.1 percent, Amphenol rallied 5.1 percent
and Crane added 3.9 percent, all on the on the New York Stock
Exchange. Paccar was up slightly on the Nasdaq.
(Reporting by Nick Zieminski, additional reporting by Scott
Malone in Boston and James Kelleher in Chicago, editing by Dave