ABB, Emerson and Siemens Poised to Buck the Industrial Trend

Tom D'Amore in Morningstar sees robust demand in 2008 for industrial controls in industrial process management and factory automation markets, despite the evidence of a weakening U.S. economy. Suppliers of such products will buck the trend of falling sales among industrial companies, D'Amore believes, and he picks out five such suppliers as his star performers: ABB Ltd. (ABB), Emerson (EMR), Honeywell (HON), Rockwell (ROK), and Siemens (SI). In particular, Morningstar considers that growth in this field will come from two factors: the demand for natural resource processing capacity for oil, gas and base metals, and the industrial expansion in emerging markets.

D'Amore explains why he believes ABB, EMR and Siemens will generate significant earnings growth in 2008:

We think Siemens stands to grow earnings by at least 20% this year, driven by increased sales of industrial controls as well as improved operating margins accomplished through restructuring. ABB should deliver earnings growth of about 19% in 2008, driven by increased sales of industrial controls as well as power products and systems. Finally, we're pegging Emerson's growth for the year at 14%, as its process management, industrial automation, and network power divisions are all poised to deliver double-digit sales growth and improved operating margins.