• United Technologies Corp. said Tuesday its first-quarter profit fell 28 percent, as frail construction markets dragged down orders for its Otis elevators and Carrier heating and ventilation systems.
• For the quarter, net income attributable to common shareholders fell to $722 million, or 78 cents per share, from $1 billion, or $1.03 per share, in the same period last year. The latest quarter's results include 12 cents per share in restructuring costs and a tax benefit of 3 cents per share. Revenue fell to $12.2 billion from $14 billion. Analysts surveyed by Thomson Reuters expected earnings of 78 cents per share.

As most of you know, its not so much about the numbers, but what they did relative to expectations. In this case, UTX did well enough, and the market liked it (at least today). They also reaffirmed guidance for FY 2009, which is rare in this market. To give you an idea how much expectations have been lowered in this market, take a look at this quote from Analyst Rick Whittington, "This would have been the quarter the wheels are falling off the bus and it didn't." "It's not a spectacular report. The Carrier and Otis order reports are weak, yet they're not zero."

• Conversely, operating profit at Sikorsky jumped 42 percent to $116 million. Results were helped by strong military orders as the Obama administration moves more troops into Afghanistan, increasing the reliance on helicopters for troop movements and other activities.
  
• (CFO) Hayes said that although order rates continue to be down, they are stabilizing, particularly in China, which is starting to see some benefits from a stimulus program equal to $586 billion.

• Heavy equipment maker Caterpillar Inc. reported its first quarterly loss in 17 years on Tuesday, hurt by plunging sales and the cost of laying off thousands of workers. It also said the Obama administration should have allocated more money for roads, bridges and other public works under its stimulus plans.
• The $112 million loss highlighted the depth and breadth of a global downturn, as the company suffered double-digit sales declines in most of its businesses. Caterpillar's vast geographic reach and array of products -- including black-and-yellow bulldozers, engines for cargo ships and mining trucks that haul materials like iron ore -- make it a bellwether of the global economy.
• In the first quarter, the Peoria, Ill.-based company posted a loss of $112 million, or 19 cents per share, versus net income of $922 million, or $1.45 per share, a year earlier.
• Equipment sales dropped 29 percent, led by a 46-percent decline in Europe, Africa and the Middle East. Sales in North America plunged 30 percent while Latin America fell 16 percent. However, sales in the Asia-Pacific region slipped just 2 percent.

This isn't that surprising as construction and mining projects are some of the first to be put on hold when there is economic uncertainty. CAT was one of the first companies to start issuing profit warnings if you think back a few quarters. So they may be the best indicator for when the cycle turns. But look at Asia! More signs of positivity about the Chinese Stimulus.

• Citing a sharp drop in global industrial demand that resulted in a 59 percent decline in first-quarter profit, chemical maker DuPont Co. said Tuesday it is boosting efforts to cut costs and developing additional restructuring plans. The Wilmington-based company also pared its full-year outlook, saying it expects volumes to continue to decline in the coming months, but not as steeply as they did in the first quarter. "It's just a very volatile environment," Chief Executive Ellen Kullman said.
• DuPont reported earnings of $488 million, or 54 cents per share, for the first quarter, down from $1.19 billion, or $1.31 per share, a year ago. Total revenue fell 17 percent to $7.27 billion from $8.77 billion a year ago as DuPont saw a drop in demand for its products in the construction and auto sectors, as well as declines in consumer spending on items such as electronic goods. Analysts expected a profit of 52 cents per share on revenue of $7.74 billion.
• The company cut its full-year earnings outlook to a range of $1.70 to $2.10 per share, from a previous forecast for profit of $2 to $2.50 per share. Analysts expect earnings of $1.88 per share, on average. "This is the fourth time they've cut guidance in six months," said Ed Yang, an analyst with Oppenheimer & Co. who has an "Underperform" rating on DuPont. "That tells me that it's a very uncertain environment and the fundamentals are extremely weak."

"Dupont has long been considered one of the classic early-cyclical bellwethers for the global economy. If conditions start to get better - in the auto business, electronics, farm economies - it’s going to show up on DuPont’s books before it shows up in the industrial production data the government puts out."

• UTX down 15%
• CAT down 22%
• DD down 17%
• NSC down 22%

• Norfolk Southern Corp., the largest rail carrier of metals and automotive products in North America, said Tuesday its first-quarter earnings tumbled 39 percent as lower costs could not offset plunging shipping demand.
• The Norfolk, Va.-based company said Tuesday it earned $177 million, or 47 cents per share, compared with $291 million, or 76 cents per share a year earlier.
• Thomson Reuters says analysts expected profit of 54 cents per share on revenue of $2.04 billion.

Its easy to see how their demand slowed. Metals and automotive products. Competitor CSX reported last week with slightly better results, but the overall trend is the same. Railroads were hot last year when energy prices spiked. I do believe high future energy prices could be a bullish catalyst for this sector, but regular old demand is much more important.

There has been talk of rails benefiting from the Stimulus Plan, but I'm not sure. More likely is money for high-speed rails between major cities. This wouldn't have much effect on a company like NSC.

Thanks for reading!