Diversified industrial manufacturer Ingersoll-Rand and engine maker, Cummins, said international demand powered first-quarter sales growth.

Overseas business accounted for 57.0% of Cummins' $3.5 billion first-quarter sales and helped to offset both rising commodity prices and lagging U.S. markets.

The engine-and-electric-power-systems manufacturer said demand for commercial generators surged in India, Britain, Asia and the Middle East while turbochargers and exhaust after-treatment products were hot items in North America and Europe.

Net income rose 33.0%, to $190.0 million, or 97 cents a share, from $143.0 million, or 71 cents a share, in the prior year. Sales rose 23.0%, to $3.5 billion from $2.8 billion in 2007's first quarter. The company's distribution business, which grew considerably in Europe, the Middle East and Asia, posted the largest growth, of 44.0%, followed by a 25.0% sales increase in its engine and components segment and 17.0% growth in sales of power-generation systems.

The results surpassed analysts' expectations for earnings of 89 cents a share and sales of $3.3 billion.

"While we are monitoring the U.S. economy closely, we intend to continue investing in opportunities around the world to fuel further growth in the future," said Chairman Tim Solso.

Ingersoll-Rand also credited higher international demand for the quarter's 9.5% sales growth. Net earnings, however, fell 16.5%, to $181.6 million, or 66 cents a share, from $217.5 million, or 70 cents a share, a year ago.

Analysts expected earnings of 73 cents a share and sales of $2.1 billion.

Ingersoll-Rand has been working to transform itself from being dependent on its capital-intense heavy machinery business to creating a more diverse product mix and a greater international presence. The company is currently finalizing its acquisition of Trane, a heating and air conditioning company (See: " Ingersoll-Rand Rides With Trane").

The company said its combination with Trane will create a global diversified industrial company with pro-forma 2008 revenues of $17.0 billion and will add a $11.0 billion Climate Control business to Ingersoll-Rand's portfolio. Trane's sales and synergies across the two companies are expected to generate savings of more than $300 million by 2010. In the first 12 months of its ownership of Trane, Ingersoll-Rand expects savings to total $125.0 million.

Trane's sales and synergies are expected to improve Rand's future earnings growth potential: pre-tax cost and sales synergies of more than $300 million by 2010. Expect to generate savings for the first 12 months of ownership of $125.0 million.

"We are managing our businesses to offset downturns in the domestic market with strong revenue growth from international operations and recurring revenues," said Chairman Herbert Henkel. "As we expected when we began our transformation in 2000, we are better positioned to withstand isolated market downturns, and our continuing focus on innovation, accelerating productivity gains and cost and expense reductions will sustain our ability to grow and deliver consistent financial results."

Ingersoll-Rand expects robust growth in developing economies to offset flat performance in North America for mid-single-digit full-year sales growth.

Cummins (nyse: CMI - news - people )' stock gained $5.16, or 9.0%, closing at $62.65, and Ingersoll-Rand (nyse: IR - news - people ) added $1.82, or 4.3%, to close at $44.38 on Wednesday.