By Mark Pender

NEW YORK (MNI) – Market News International’s U.S. capital goods
index is little changed in the Nov. 12 period, at 70.5 and consistent
with steady and moderate acceleration for the sector, according to MNI’s
weekly survey.

On-year sales for the 575-company sample are +14.1% with income
+24%. Currency translation is shaving 2% from foreign sales.

New troubles for the Boeing 787 pose a substantial risk to
fourth-quarter and first-quarter growth in the capital goods sector. For
the 747-8, Boeing plans to deliver the freighter at mid-year, pushed
back in September from a year-end target. LMI Aerostructures (LMIA)
blames the 747-8 delays for a sizable decline in third-quarter sales.

Competition in difficult markets along with rising commodity prices
are putting substantial pressure on margins in the non-residential
group. HVAC maker Aaon (AAON) is posting sales growth at the cost of
profit growth.

Citing international solvency issues and their impact on
government-funded health systems, medical-equipment maker Alphatec
(ATEC), which operates in 50 international markets, cut guidance
substantially. The maker of spine products also cites uncertainty over
procedural volumes in the U.S.

Filter-systems maker Peerless Manufacturing (PMFG) reports no
better than mixed activity citing challenging conditions in North
America and Europe. It reports strong short-cycle activity in the Middle
East and South America.

Electronics contract manufacturer Nortech Systems (NSYS) said
customer confidence is returning across its core markets: industrial,
defense, medical. The company is encouraged by trends and backlog.
LaBarge (LB), which serves the same markets, also posted very strong
results.

The week’s biggest news was Cisco’s (CSCO) steep pullback in
guidance, pointing to a mid-single digit on-year sales gain in its
January quarter vs. on-year gains of 19% and 31% in prior quarters.

Chip-tool maker Brooks Automation (BRKS) is reporting moderation at
high growth levels. On-year sales growth slowed to two-fold in its
September quarter following prior quarter gains of three-fold and
four-fold.

Sales at communications-equipment maker Clearfield (CLFD) are up an
on-year 20% as funds from the American Recovery & Reinvestment Act begin
to flow and customers begin to deploy their networks.

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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