Filtration, separation, and purification giant Pall (NYSE:PLL) reported an 11% increase in revenue for the first fiscal quarter. To make earnings look good, which the company trumpets as increasing 18.5% on a "pro forma basis," you have to subtract out restructuring and other charges. Net earnings, as reported, fell 13.7%.

Sales growth was good in both business segments. Industrial (60% of total sales) saw an overall 12% growth in sales -- with an outstanding 29% increase in microelectronics masked by an 11% decrease in aerospace. Revenue at Life Sciences (40% of total sales) grew 9% with biopharmaceuticals reporting a healthy 18% increase.

When it came to operating profits, the smaller Life Sciences business produced 53% of the total operating profits. Hurting Industrial margins was a 55% drop in aerospace profits (although the company remains "positive" about aerospace operations for the year).

While analysts expect a 14% increase in earnings this year and a 12.5% gain next year, there is one beefed-up competitor in the marketplace. General Electric (NYSE:GE) is going to spend $1.1 billion in cash to purchase water treatment company Ionics (NYSE:ION).

While Pall is the global leader in its markets, there is mounting competition from industrial giants. From Dow Chemical (NYSE:DOW) to ITT Industries (NYSE:ITT), there is a large industrial need for filtration, separation, and purification. While this competition might make Pall and smaller competitor Cuno (NASDAQ:CUNO) interesting acquisition targets, their margins could weaken if the big boys try and "buy business" to gain market share.

With a net debt (debt minus cash) of $365 million, and earnings growth in the low to mid-teens, Pall seems adequately priced at 19 times earnings.

Fool contributor W.D. Crotty does not own stock in any of the companies mentioned but does filter tap water at home.