BOSTON (Reuters) - Diversified U.S. manufacturer SPX Corp topped Wall Street's profit expectations as strong demand for equipment used in food and beverage production offset lower selling prices for electrical transformers.
The company held steady the 2011 profit forecast it issued last month, which calls for growth of about 20 percent, and Chief Executive Chris Kearney said demand for SPX's products was picking up.
"Order activity has been better at the outset of 2011 than it was a year ago," Kearney told investors on a conference call. "We believe our company, as a whole, is in the early stages of recovery."
The company, which also makes cooling towers for power plants and tools used by professional car mechanics, said on Thursday that net profit came to $65.3 million, or $1.29 per share. A year earlier, it reported a net loss of $72.1 million, or $1.46 per share, after a large noncash charge to write off goodwill at its car-tools unit.
Factoring out a tax settlement, earnings came to $1.13 per share, above the $1.09 analysts on average had expected, according to Thomson Reuters I/B/E/S.
Revenue rose to $1.33 billion from $1.32 billion, but missed analysts' expectations of $1.36 billion.
The deterioration in prices on transformers -- which fell during the recession as utilities cut back on investment -- was not as bad as analysts had feared in the quarter, said Deutsche Bank's Nigel Coe.
"The negative impact of lower priced transformers shipped from the backlog is not as bad as feared and so reduces the risk of downside to FY11," Coe said.
The Charlotte, North Carolina-based company confirmed the 2011 profit forecast of $4.20 to $4.50 per share from continuing operations this year.
SPX's competitors include German engineering group GEA Group AG
Shares of SPX are up about 50 percent over the past year, outpacing the 36 percent rise of the Standard & Poor's capital goods index <.GSPIC>.
(Reporting by Scott Malone; Editing by Lisa Von Ahn, Dave Zimmerman)
