The year ahead for U.S. industrial companies is looking a little brighter than it seemed a few months ago, as economic conditions improve in North America and demand in key business segments strengthens.

Large manufacturers, led by 3M Co., Illinois Tool Works Inc and Parker Hannifin Corp., raised 2012 profit forecasts on Tuesday as they reported stronger-than-expected results.

The three posted results that topped Wall Street estimates, and all raised their outlooks. United Technologies Corp also beat forecasts but noted an uneven global economy and kept its outlook steady.

"We have seen some encouraging signs in the United States over the last several months," said United Tech Chief Financial Officer Greg Hayes, noting that sales of Carrier air conditioners had picked up since mid-March.

Fellow blue-chip 3M, which makes products ranging from Post-It notes to films used in flat-screen televisions, cited Europe, Japan and China as areas of concern but said growth should pick up in the second half.

"I am confident in our ability to improve every aspect of our company," said Chief Executive Ingle Thulium, who took over from George Buckley this year.

IMPROVING VIEWS

Since forecasts are often based on orders for products with long lead-times, analysts and investors say predictions of a second-half rebound are credible, despite many uncertainties.

Companies that sell to the auto and aerospace industries have done well this earnings season, said analyst Jeff Wind of Edward Jones.

"Industrial markets have proved pretty solid, especially in North America," he said. Pockets of weakness include anything tied to consumer electronics, as 3M's results showed.

"It looks like there may be some uptick here in the second half," Wind said, who noted that industrial stocks have pulled back whenever fresh evidence of weakness emerges in Europe.

Any sign of improvement, or a move to stimulate Europe's economies, would be a positive catalyst for shares that have come off their highs ahead of earnings season, he said.

3M raised the low end of its 2012 profit forecast by 10 cents, saying it now looks for earnings of $6.35 to $6.50 per share, which would represent growth of about 8 percent.

ITW, which makes construction materials, welding equipment and restaurant supplies, said it now looks for profit of $4.14 to $4.38 per share, up 12 cents from its prior forecast, for about 13 percent profit growth.

Much of ITT's raised profit forecast reflected a stock buyback. The company trimmed its revenue forecast slightly.

Parker Hannifin, a maker of control systems for manufacturing and transportation, raised its full-year profit forecast to a range of $7.30 to $7.50 per share. The new target would mean growth of about 16 percent.

Parker also raised its dividend 5 percent, marking the 56th straight year of higher payouts. Early indications suggest fiscal 2013, which starts in July, will be another year of growth for the company, CEO Don Washkewicz said.

Parker Hannifin shares rose 6.5 percent to $86.21, 3M rose 1.9 percent to $88.86, ITW rose 2.6 percent to $56.63 and United Tech rose 0.7 percent to $80.30, all on the New York Stock Exchange.

Their reports follow market-beating results from General Electric Co., Innersole Rand Plc, Dana her Corp. and Eaton Corp. Eaton's CEO said on Monday the U.S. economy was stronger than expected.

United Technologies said it would boost restructuring spending to improve profit margins. Its caution reflected its complicated year — the company is closing on its largest-ever acquisition, a $16.5 billion purchase of Goodrich Corp., and trying to sell smaller businesses to help fund the transaction without selling more common shares.

"They're in the process of trying to reposition their portfolio and it's not happening as quick as they want," said Catherine Avery, president and CEO of CAIMAN LLC, which holds shares of United Tech and ITW, as well as Emerson Electric, which reports next week.

One of Avery's worries for the sector is that while many of the companies she tracks are forecasting a stronger second half of the year, it is not clear key markets like China will turn around by then.

"What concerns me is that China has slowed down so much," she said.

In other results on Tuesday, truck maker Paccar lowered its forecast of European retail sales as it reported market-beating earnings. Paccar said U.S. truckers were carrying more freight and demanding more from their vehicles, which is driving replacement demand.

Pentair, which makes water treatment and thermal management products, beat on profits but disappointed on sales and trimmed its full-year revenue outlook. Lincoln Electric and Carlisle Cos. beat Street estimates on both earnings and sales.