May 22 (Reuters) – U.S. companies borrowed more in April than a year ago to buy equipment, mainly to replace aging goods rather than for expansion, the Equipment Leasing and Finance Association said on Tuesday.

Borrowing levels in April, however, were down from March, the trade group said.

Expansion-related spending by corporations is unlikely to gain much traction due to clouds cast by the uneven U.S. economic recovery and euro zone turmoil.

Companies took on $6.1 billion in loans, leases and lines of credit to fund equipment in April, up 20 percent from $5.1 billion a year earlier, but 10 percent below March’s $6.8 billion, ELFA said.

“The euro zone is the real wild card, and it’s the regulatory environment, it’s an election year, it’s the price of oil, the potential crisis in the Middle East and the slowing of China’s expansion,” the group’s chief executive, William Sutton, said in an interview.

“Put all that in a pot and stir it around and what you’ve got is slow growth,” he added.

New business loan volume has increased by 17 percent so far this year, according to ELFA, a trade association with over 550 members that reports economic activity for the $628 billion equipment finance sector.

By Lynn Adler

(Reuters) – Deere & Co <DE.N posted higher quarterly earnings that topped estimates on Wednesday and raised its full-year outlook on rising global demand for farm equipment.

The farm sector is booming on higher worldwide food demand and as biofuels help drive up crop production. Companies like Deere are benefiting from record-high farm income that is spurring farmers to update their equipment.

The world’s largest farm equipment maker said fiscal second-quarter net income rose to $1.056 billion, or $2.61 per share, from $904.3 million, or $2.12 a share, a year ago. The results topped the average estimate of $2.53, according to Thomson Reuters I/B/E/S.

Net sales of equipment operations rose to $9.4 billion from $8.33 billion a year earlier.

The company also raised its forecast for 2012 net income to about $3.35 billion from $3.275 billion.

It reported net earnings of $3.91 per share for the first half of the year, up from $3.32 a year earlier.

May 16 (Reuters) – Deere & Co <DE.N posted higher quarterly earnings that topped estimates on Wednesday and raised its full-year outlook on rising global demand for farm equipment.

The farm sector is booming on higher worldwide food demand and as biofuels help drive up crop production. Companies like Deere are benefiting from record-high farm income that is spurring farmers to update their equipment.

The world’s largest farm equipment maker said fiscal second-quarter net income rose to $1.056 billion, or $2.61 per share, from $904.3 million, or $2.12 a share, a year ago. The results topped the average estimate of $2.53, according to Thomson Reuters I/B/E/S.

Net sales of equipment operations rose to $9.4 billion from $8.33 billion a year earlier.

The company also raised its forecast for 2012 net income to about $3.35 billion from $3.275 billion.

It reported net earnings of $3.91 per share for the first half of the year, up from $3.32 a year earlier.

U.S. farmers planted the largest corn crop in 75 years this year, underscoring greater need for tractors and combine harvesters.

By Lynn Adler

(Reuters) – Foreign investment in the United States is ebbing and beefing it up is critical for economic growth as each job at a foreign company’s U.S. unit supports three others, the Organization for International Investment said on Thursday.

A complex U.S. tax code and increasing global competition are curbing business development here by foreign companies. That trend is worrisome because foreign firms generally pay salaries to U.S. workers that exceed the industry average. This type of foreign investment, in turn, drives up employment and consumer spending.

“The global investment pie around the world has been getting larger, but our slice of that pie has been getting smaller as well as the share of GDP that foreign investment in the U.S. represents,” Nancy McLernon, president and chief executive officer of the OFII, told Reuters in an interview.

Based in Washington, the OFII is a 21-year-old nonprofit business association representing about 160 U.S. companies with foreign parents.

In its first study of the ripple effects of foreign investment in the United States, the OFII said U.S. subsidiaries account for 21 million jobs directly and indirectly – or 12.2 percent of total employment. The OFII study, conducted by PricewaterhouseCoopers LLP, is scheduled for release later on Thursday at around 10 a.m. Eastern time.

Every dollar paid directly by foreign companies’ U.S. units supports an added $2 in total U.S. compensation to supply-chain workers and companies that benefit from paycheck spending.

May 7 (Reuters) – General Electric Co is buying a 15 percent stake in Shanghai-listed China XD Electric Group for about $535 million, giving the largest U.S. conglomerate a foothold in China’s vast electrical infrastructure market and access to XD’s technology.

The two companies have also agreed to form a joint venture to distribute GE’s electrical grid solutions to XD’s local customers. XD will control 59 percent of the joint venture, with GE owning the rest, a source with direct knowledge of the matter told Reuters.

Strapped for growth in their home market, U.S. and European companies have been long trying to access China’s vast and rapidly growing economy.

Often, Chinese regulations limit buyers from buying control of Chinese companies and multinational companies have structured joint venture deals or settle for small minority stakes.

This deal signifies a shift in China’s industrial sector, as it evolves from a low-cost manufacturer to having technology of its own that can be exported. Under the deal, GE will use XD’s technology to build the old legacy transformers which will then be sold using GE’s global sales network.

The joint venture gives GE access to “primary” equipment such as large transformers and breakers that modify and switch power within the grid, Bob Gilligan, president and chief executive officer of GE’s digital energy business, said in an interview.

China has developed technology used on a large scale for a competitive portfolio of products, Gilligan added.

By Lynn Adler

(Reuters) – United Parcel Service Inc (UPS.N: Quote, Profile, Research, Stock Buzz) reported lower-than-expected quarterly earnings on Thursday as margins were hurt by customers choosing slower delivery options and on weak shipments from Asia.

Shares in the world’s largest package delivery company fell as much as 3.8 percent on the results, which Chief Executive Scott Davis said reflected austerity measures in Europe and slowing growth from Asia.

“During the quarter the most positive news has come from the U.S. where indications of economic rebound are evident,” Scott said on a conference call with analysts. The slowing Asia flows are a “temporary predicament” and volume started picking up in March, he added.

“Customers are going toward slower delivery methods — deferred delivery had strong growth” of about 10 percent, said Edward Jones analyst Logan Purk. “The international business is also definitely underperforming the domestic and that’s impacting the results” particularly Asia exports.

The Atlanta-based company’s lagging international performance in the midst of its biggest takeover in its nearly 105-year history.

UPS announced in March that it will buy Dutch peer TNT Express (TNTE.AS: Quote, Profile, Research, Stock Buzz) for about $6.8 billion to broaden its international footprint, becoming the market leader in Europe and increasing its access in Asian and Latin American markets.

By Lynn Adler

(Reuters) – Rockwell Automation Inc (ROK.N: Quote, Profile, Research, Stock Buzz) reported a lower-than-expected quarterly profit on increased expenses and a higher tax rate, and the company narrowed its 2012 forecast.

Shares of the producer of systems that make factories run more smoothly were down 2.5 percent at $75.48 in midday trading after falling nearly 6 percent before the market opened.

The company reported higher net expenses and a higher effective tax rate — 24.9 percent compared with 18.3 percent a year earlier — chipping away at some of the profit expected by analysts.

Excluding that, operations were still slightly short of expectations, which had gotten too optimistic after an above-forecast first quarter, said Jeff Sprague, an analyst at Vertical Research Partners. Still, “the complexion of the results are decent, with the growth in China and Europe, and U.S. trends were pretty good, so they do seem to be executing pretty well.”

Sales in China in the quarter rose 7 percent, “one of the better China performances we’ve seen this earnings season,” and rose 5 percent in economically unsettled Europe, he added. Sales also increased 5 percent in the United States.

Rockwell Automation said it expected stronger growth in its emerging markets business in the second half of its fiscal year and sequential growth in more mature markets.

April 25 (Reuters) – Rockwell Automation Inc reported a lower-than-expected quarterly profit on increased expenses and a higher tax rate, and the company narrowed its 2012 forecast.

Shares of the producer of systems that make factories run more smoothly were down 2.5 percent at $75.48 in morning trading after falling nearly 6 percent in light activity before the market opened.

The company reported higher net expenses and a higher effective tax rate — 24.9 percent compared with 18.3 percent a year earlier — chipping away at some of the profit expected by analysts.

Rockwell Automation said it expected stronger growth in its emerging markets business in the second half of its fiscal year and sequential growth in more mature markets.

“We continue to build our capabilities in emerging markets, and while there may be a slowdown in some of the growth rates, the rates are still higher than in many of the the mature economies and markets,” Chief Executive Officer Keith Nosbusch said in a Wednesday interview.

Rockwell generates half of its sales in the United States, 22 percent in emerging markets and 28 percent in other countries, he said.

Rockwell said net income had risen to $167.8 million, or $1.16 per share, in the second quarter ended on March 31 from $166.4 million, or $1.14 per share, a year earlier.

April 24 (Reuters) – Railroads Kansas City Southern and Norfolk Southern each reported higher quarterly profit that beat Wall Street estimates, as automotive and intermodal shipments more than offset weakness in coal volume.

A swelling of demand for autos and related parts and materials was one of the biggest profit drivers for the railroads in the first quarter.

Intermodal refers to the shipment of goods in containers that can be shifted from one mode of transportation to another.

Coal volume fell at all major U.S. railroads during the quarter as unusually mild winter weather and decade-low natural gas prices reduced demand from utilities. The railroads expect to make up for some of this year’s drop in domestic coal volume by shipping more coal for export.

Norfolk Southern, the third-largest publicly traded U.S. railroad, said a double-digit increase in auto shipment volume overshadowed a double-digit drop in coal traffic. Pricing gains and fuel surcharges drove revenue higher.

“We continue to believe that the United States is on a path of continued, albeit slow, growth, and we feel confident that we can continue to grow our merchandise and intermodal volumes at above the rate of total economic growth,” Norfolk Suffolk’s chief executive, Wick Moorman, told analysts on a call.

The company said net income increased to $410 million, or $1.23 per share, in the first quarter, from $325 million, or 90 cents a share, a year before. That handily topped the $1.12 per share expected on average by analysts, according to Thomson Reuters I/B/E/S.

April 24 (Reuters) – Railroad operating company Kansas City Southern’s quarterly results beat forecasts, sending its shares up 5 percent.

Kansas City Southern, the third major U.S. public railroad to report a higher-than-expected profit despite weak utility coal volume in the first quarter, cited robust automobile and intermodal shipment revenue as well as growing cross-border business with Mexico.

Intermodal refers to the shipment of goods in containers that can be shifted from one mode of transportation to another.

“Most importantly we are simply not hearing any talk about a softening or decline in business levels from any of our major customers,” Pat Ottensmeyer, executive vice president of sales and marketing at Kansas City Southern, told investors on a Tuesday conference call.

The Kansas City, Missouri-based company, which relies heavily on shipments to and from Mexico through its unit Kansas City Southern de Mexico, had a 7 percent increase in carloads and record quarterly revenue.

Coal represented 14 percent of Kansas City Southern’s revenue in 2011, a smaller share than at the larger railroads, and the company said it expects utility coal demand to pick up in the second quarter.

Lower coal carloads have also partially been offset by increasing “shale-play” volume.