Pall Corporation (NYSE:PLL), a diversified industrial company with a $4.3 billion market cap, recently posted earnings for its first quarter. The company has a strong business in filtration equipment. While revenues were down by 5%, net income was up to $67 million from $43.1 million in the first quarter last year. Pall's earnings per share came in at 56 cents, versus 36 cents during the same quarter last year. Considering how hard large industrial companies have been slammed by the recession, Pall's performance is fairly good. (Explore the risks of investing in conglomerates by reading Conglomerates: Cash Cows or Corporate Chaos?)

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Pall's Advantage
Pall Corporation functions in a niche which is not overcrowded. Its filtration systems, used by pharmaceutical companies in chemical processes, comprise the biopharmaceutical work of the company's life sciences segment. In addition, Pall is deeply engaged in creating water filtration systems for the pharmaceutical industry, a segment the company is known for. These unique businesses go along well with other work the company does in the aerospace, energy and microelectronics industries, which make up its industrial segment. Compared to other major diversified industrial companies such as Siemens AG (NYSE:SI) or engineering and construction firms such as Fluor (NYSE:FLR), it is apparent that Pall is in a good position to exploit its uniqueness.

Other Industrial Plays
Large industrial companies such as Pall, and engineering and construction firms such as Fluor and Siemens, point to the global health of the industry and the infrastructure economy. However, smaller firms are in on the action, too. Washington state-based Flow International (Nasdaq:FLOW), a manufacturer of water jet cleaning equipment, is one such example. Meanwhile, MFRI (Nasdaq:MFRI), a piping, cooling and filtration company that has a market cap of only one-tenth that of Pall, is another. MFRI posted good profits in its recent quarter despite the harsh climate for the industry.

Donaldson (NYSE:DCI), a much larger company that manufactures industrial filters and engine products, also turned in fine profit numbers in its recent fiscal first quarter. The company saw sequential improvement in sales for its engine products division. In addition, Donaldson was cited as successfully maintaining profitability during the recession while also generating a strong return on equity.

However, the engine products business remains mixed, as noted in a recent article on Cummins (NYSE:CMI) and Kubota (NYSE:KUB). Cummins, widely known for its industrial vehicle engine business and its extensive work in vehicle filtration systems, has not had quite the same growth rate or robust prospects as Kubota.

Johnson Controls (NYSE:JCI), a manufacturer of automotive and industrial systems such as temperature regulation systems for buildings, is known for its steady, reliable stock. The stock has seen substantial dividend growth, despite having part of its business rooted in the devastated automobile industry. However, Johnson Controls manufactures automobile seats, which is another uncrowded niche. Industrial companies often expand and diversify to get a foothold in newer markets or to nail down favorable niches. Siemens is doing a similar thing with its wind turbine initiative.

Prospects For Pall
Pall, like many of the large diversified industrial, engineering, construction and infrastructure firms, held its own despite being hammered by the recession. More importantly, it has strong core businesses with favorable niches and specialties that will drive the company forward in the future when the economy recovers. Long-term, Pall and the industrial sector at-large is worth a continuing look. (For more safe investment options, refer to 5 "New" Rules For Safe Investing.)

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