WRAPUP 1-U.S. manufacturers’ view rosier as demand returns

* United Tech, Textron, Eaton boost 2010 forecasts

* United Tech CEO cites improved end markets

* CEOs caution that recovery still uncertain

* Textron, Eaton, United Tech shares up

By Scott Malone and Nick Zieminski

BOSTON/NEW YORK, July 21 (BestGrowthStock) – Three major U.S.
manufacturers raised their profit targets for the rest of the
year on Wednesday, saying they were confident that a rebound in
demand for industrial goods would hold.

Shares of United Technologies Corp (UTX.N: ), Textron Inc
(TXT.N: ) and Eaton Corp (ETN.N: ) rose after they posted
second-quarter results that topped Wall Street’s expectations,
easing concerns that the economy might be sliding back into

United Tech, the world’s biggest maker of elevators and air
conditioners, posted better-than-expected quarterly profit and
revenue and it raised its 2010 profit target for the second
time this year. It expects full-year profit of $4.60 to $4.70
per share, representing growth of 12 to 14 percent.

Textron, the world’s biggest maker of corporate jets, also
posted results that beat Wall Street’s forecasts.

Investors have been focused on revenue, taking that as a
more bullish sign than profit growth, which in part reflects
the payoff of the tens of thousands of jobs that major U.S.
manufacturers shed last year.

Providence, Rhode Island based Textron, which also makes
Bell helicopters and EZ-Go golf carts, looks for full-year
profit of 55 cents to 65 cents per share. At the high end, that
range represents growth from last year — suggesting the
company could beat new CEO Scott Donnelly’s target of a return
to profit growth in 2011. [ID:nN21127152]


Donnelly, a former General Electric Co (GE.N: ) official who
became Textron’s CEO in December, acknowledged that demand for
big-ticket items including Cessna jets wavered late in the
quarter in the wake of Greece’s sovereign debt crisis.

“The pace of the recovery remains uncertain with the
European sovereign debt concerns, which have negatively
impacted business and consumer confidence,” Donnelly said on a
conference call with analysts.

Profit growth at Textron’s helicopter, military and
industrial units offset a slide at Cessna.

Growth outside the United States, where recovery has been
sluggish, has been a key boost for major manufacturers this
year and the greatest risk many face is the possibility of
slowing demand in Asia, which has been robust.

Eaton CEO Alexander Cutler cited that concern, though he
expressed confidence the Cleveland-based maker of hydraulic and
electrical systems would manage its way through it.

Eaton raised its profit forecast sharply, looking for
earnings of $4.90 to $5.10 per share, above its earlier
forecast of $4.30 to $4.60 per share. It also said it would
raise its quarterly dividend. [ID:nN21127613]

“While the debt problems in Europe are likely to slow the
rate of growth in some European markets, and the rate of
economic growth in China has moderated slightly, we anticipate
solid global growth continuing during the second half of the
year,” Cutler said.

Textron shares rose 7 percent to $19.37, Eaton rose 4
percent to $71.65 and United Tech shares were up less than 1
percent to $67.91 on the New York Stock Exchange.

The industrial sector has moderately outperformed the
broader market this year, with the Standard & Poor’s capital
goods industry group (.GSPIC: ) notching a rise of 0.75 percent
at a time the broad S&P 500 (.SPX: ) is down 3.9 percent.

For a graphic on manufacturing earnings, click on

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(Reporting by Scott Malone; Editing by Derek Caney)

WRAPUP 1-U.S. manufacturers’ view rosier as demand returns