Control systems manufacturer Parker Hannifin (NYSE: PH) recently posted its third-quarter numbers, topping Street expectations. The company further impressed investors by raising its earnings forecast for fiscal 2012 and by increasing its quarterly dividend by 5% to $0.41 per share.

And Parker isn't alone in its performance. In fact, when you look at the broader picture, several manufacturing companies are posting impressive profits and raising their annual outlook, despite a slow-moving Chinese economy and the prevailing recessionary phase in Europe. For instance, industrial-goods maker Eaton (NYSE: ETN) also reported earnings that exceeded analyst expectations and raised its yearly outlook.

The reason: North America.

Win some, lose some
Parker sells industrial products both in the North American market and internationally, along with offerings from its aerospace and climate-control divisions. During the quarter, the company's revenue increased to $3.39 billion, a 5% increase from a year ago.

On the other hand, the bottom line rose 12% to $312.1 million. That translates into earnings of $2.01 per share, comfortably beating analyst estimates of $1.71 per share, as the company benefited from increased orders in the North American industrial segment.

Parker's strong numbers were largely the result of solid performances in two of the company's major units -- industrials and aerospace -- in the North American region. Thanks to a 7% increase in industrial orders and a 4% increase in aerospace orders, there was a 12% and 8% subsequent growth in sales of the two units, respectively. The performance of Parker's North American industrial business was particularly important, considering that this unit contributes 39% to the company's overall sales.

However, financial headwinds in Parker's international businesses continued to take a toll on the company's overall performance. Its international industrial segment sales, which accounts for a significant 38% of its total revenue, recorded zero growth during the quarter. In fact, sales in this segment recorded slightly negative growth in the wake of declining orders resulting from softness in international markets.

Building on through acquisitions
Parker isn't banking on geographic dynamics alone in its quest for growth. The company is planning to buy U.K.-based Olaer Group, manufacturer of a wide variety of cooling technologies and advanced hydraulic accumulators. It hopes to expand its operations in Europe and Asia with this move, apart from increasing its technical know-how in the realm of cooling and accumulator systems. Parker also hopes the acquisition will lift dwindling international sales of industrial products.

But the competitors aren't too far behind. Emerson Electric (NYSE: EMR), a company that also has exposure to climate technologies and industrial goods, recently announced that it will buy the marine container and boiler business from Johnson Controls (NYSE: JCI) to boost its climate-based prospects, which have been hurt by a sluggish housing and construction market in the U.S. and China.

The Foolish takeaway
Although Parker Hannifin has posted encouraging numbers, it should be cautious of its international sales and, at the same time, continue to build on its strengths in the domestic market. The company now expects to earn an annual profit of $7.30 to $7.50 per share for the entire year, higher than its earlier estimates of $6.90 to $7.30. I'm keeping an eye out for this company, and so can you by adding Parker Hannifin to your free Watchlist for all our Foolish analysis on this stock.

Earnings season is here in full force, and earnings reports are a great peek into how a business is performing, as well as how it might deliver over several years. Make sure to check out our free report, "5 Stocks Investors Need to Watch This Earnings Season."