Diversified U.S. manufacturers Textron Inc
Both those companies, and fellow industrial company SPX Corp
Shares of Textron and SPX fell and Rockwell rose on Wednesday, on a day that U.S. stocks were broadly higher.
We are in the midst of a serious global recession, said Keith Nosbusch, chief executive of Rockwell, which cut its fiscal 2009 profit target for the second time this year.
There is still a great deal of uncertainty, Nosbusch told investors on a conference call. There are some signs that both macro indicators and customer activity is beginning to stabilize. We believe it's too early to declare that the market has bottomed, but we do believe the steepest sequential declines are behind us.
The Milwaukee-based maker of systems that help factories run more smoothly experienced the sharpest drop in demand from its customers in the United States, which set the current worldwide downturn in motion when the housing and credit bubbles burst.
Providence, Rhode Island-based Textron also slashed its profit forecast. The world's largest maker of business jets has been hard hit by a sharp falloff in demand for its aircraft -- customers during the quarter canceled 92 orders for the aircraft, which have become a symbol of corporate excess during the downturn.
The company is also scrambling to downsize its money-losing finance arm, which was hard hit by the credit crunch.
'09 earnings will depend in large measure on the economy and to what extent business jet orders recovery, said Chief Executive Lewis Campbell, on a conference call with investors on Wednesday. Our earnings performance is going to be tough this year.
Analysts said even the company's reduced forecast, which anticipates full-year profit of 45 cents to 75 cents per share, below its earlier forecast of $1 to $1.50 per share, is no sure thing.
Underlying earnings in 2009 are weaker than expected, wrote Citigroup analyst Jeffrey Sprague in a note to clients about Textron. Earnings risks are still very high.
Charlotte, North Carolina-based SPX, which makes products ranging from cooling towers for power plants to diagnostic tools used to fix autos, posted a 60 percent drop in earnings and held to its current 2009 profit forecast, which it had cut earlier in the month.
SPX said its-short cycle test and measurement and flow technology businesses saw significant order slowdowns in order activity as the first quarter progressed.
We're starting to see a slowdown of orders for new power projects, Chief Executive Chris Kearney told analysts on a conference call. We do not expect a meaningful recovery in any of our key end market in 2009.
Orders for cooling systems and thermal equipment also slowed in recent months, reflecting lack of financing, volatile raw material costs and reduced electricity demand, SPX said. China is the one region where power infrastructure growth remains steady.
Textron shares were down 2 percent, or 22 cents, at $10.98, SPX was down 8 cents at $46.47 and Rockwell was up 5 percent, or $1.63, at $31.54 on the New York Stock Exchange.
(Reporting by Scott Malone in Boston, additional reporting by Nick Zieminski in New York)