By Mark Pender

NEW YORK (MNI) – The favorable run of pre-announcements is proving
representative of both final first-quarter earnings and second-quarter
forecasts as MNI’s capital goods index firmed slightly in the April 23
period to 59.6 to indicate solid year-on-year growth for the sector,
according to Market News International’s weekly survey.

Year-on-year sales are +6.9% with currency effects, as they have
since turning positive in January, adding 3% to export sales. Income is
at +29%. The period’s sample size is 204.

Electronics is the center of strength with non-residential
construction continuing to decline.

Chip-equipment maker Cohu (COHU) ended a long streak of
disappointment with strong first-quarter results that include the
highest level of orders in 10 years. Chip-equipment maker CyberOptics
(CYBE) also ended a long run of disappointment.

Demand from the industrial and communication markets is driving
exceptionally strong results for power-chip maker Intersil (ISIL). The
company is not worried about an inventory build, saying inventories
remain at historically low levels.

Non-residential construction is the main market for
electrical-products maker Hubbell (HUBB) which sees a 20% decline this
year for the sector. Amcol Environmental (ACO), which makes clay
products for commercial construction, warns that conditions are still
very slow in most regions.

Wire-reinforcing products maker Insteel (IIIN) warns that
consumption of its products will remain depressed due to weakness in
construction. It expects federal infrastructure stimulus to be offset by
deterioration in state and local governments.

Heavy-equipment maker Terex (TEX) is tied to the construction
market and continues to report sales contraction, backlog draw and an
operating loss. It sees continued North American contraction for 2010.

Sequential sales at commercial & industrial lighting maker LSI
Industries (LYTS) are on the decline. The company said “recessionary
influences” continue to hurt its business. Diversified manufacturer
Thomas & Betts (TNB) reports no signs yet of recovery in
commercial-construction markets.

In a positive note out of the utility sector, Badger Meter (BMI)
said a mid-February federal allocation of stimulus funding to utilities
tripped a surge of orders in March that has carried over into April. The
company notes the rise in orders is an offset to high copper costs.

Editor’s Note: MNI compiles its capital goods index based on a
weekly sample of company news and data.

** Market News International New York Newsroom: 212-669-6430 **

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