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 included Illinois Tool Works Inc , Eaton Corp and Parker Hannifin Corp -- all of them diversified industrial manufacturers with broad geographic exposure. Also beating estimates were truck maker Paccar Inc and electronic component maker Amphenol Corp.
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.
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.
"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.
'Global Recovery'
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.
"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 sequentially.
Crane Co posted a beat and said profit would hit the high end of its range for the year.
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. (Reuters)
