Strong demand for industrial goods from customers in emerging economies helped a half dozen U.S. manufacturers produce pleasant earnings surprises on Tuesday.
Several also raised their full-year sales and profit forecasts on the strength of their sales in the developing world.
But the results from Tyco International Ltd 3M Co Cummins Inc and Agco Corp and others also underscored the weakness that bedevils more developed economies.
Caterpillar Inc , the world's largest maker of construction and mining equipment, established the theme on Monday, reporting stronger-than-expected profits, almost exclusively on the strength of emerging markets.
We faced contrasting regional industry demand among the major global agricultural markets during the first quarter of 2010, Martin Richenhagen, Agco's chairman, president and chief executive officer, said in a statement.
In Brazil, market demand was near record levels, and we were very pleased with our sales and margin performance. In Western Europe, industry conditions continued to soften throughout the first quarter and remained below the strong levels that existed in early 2009.
Cummins, which makes diesel engines and gas turbines, was the biggest surprise, delivering a profit of 75 cents a share to a market that was expecting a profit of just 35 cents a share.
The driver was demand for its engines and power generation equipment from China, India and Brazil, which offset continued weak demand for truck engines in North America.
3M, which delivered earnings that beat market expectations by 19 cents or about 10 percent, reported that sales in the Asia-Pacific region alone were up 54.1 percent during the quarter -- growing five times as fast as the United States.
Tyco International Ltd also beat and raised thanks in part to its international sales.
Oliver Pursche, executive vice president with Gary Goldberg financial services in Suffern, New York, which runs the GMG Defensive Beta Fund, said that his firm is underweight industrial stocks partly because of their recent run-up ahead of the earnings season, he likes Tyco's exposure to global infrastructure growth.
A large, large market in terms of growth is going to come from emerging markets, in particular Asia and Latin America, he said.
The results were consistent with results released on Monday by Caterpillar, which posted a stronger-than-expected quarterly profit and raised its full-year profit and sales forecasts, citing an improving global economy, especially in Asia and Latin America.
(Reporting by James B. Kelleher; Editing by Derek Caney)