By Mark Pender

NEW YORK (MNI) – MNI’s U.S. capital goods index edged back nearly
two points in the April 29 period to 77.9, above 50 to indicate
year-on-year growth and near the top of trend to indicate accelerating
growth, according to the results of Market News International’s weekly
survey released Monday.

Year-on-year sales of +16%, one of the best readings of the
recovery, helped extend momentum for the averages. Currency is adding
one percentage point to export sales.

For income, the rate of year-on-year income growth, at 26%, isn’t
showing any momentum and is near the low end of a narrow trend. Sample
size is 393 companies.

MNI’s data point to low single digit quarter-to-quarter growth for
the Commerce Department’s nondefense category, a gain that would be an
improvement from the scant growth of 0.3 percent registered in the first
quarter.

Many companies are raising guidance and are hiring in what is a
very strong run of good news from the sample. The negative effects of
Japan are so far limited.

Rimage (RIMG) has secured alternate supply sources at additional
material and shipping costs and the maker of archiving systems expects
to meet second-quarter orders. First-quarter sales at the company were
$22 million for a 17% year-on-year gain.

Intersil (ISIL) is trimming second-quarter estimates because of
Japan which so far has had little impact. The maker of phone and
flat-panel chips sees a sequential gain in sales to a $208 million
mid-point which however, for the year-on-year rate, would mark a pivot
into the negative column.

Specialty metals producer Carpenter (CRS) is successfully passing
through costs. It sees continued double-digit growth in demand and is
preparing to increase capacity.

Natus Medical (BABY) believes global hospital spending is improving
and they point to an increase underway for large orders of medical
equipment. At a $63 million midpoint, the company’s second-quarter sales
guidance would make for a second straight quarter of 20% year-on-year
growth.

Because of the Federal budget crisis, road-equipment maker Astec
Industries (ASTE) doesn’t expect Congress to pass a very robust highway
bill. The company is focused on its international markets where sales
are strong.

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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