Emerson raises 2010 forecast to reflect deals-UPDATE 1

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Saturday September 11, 2010 04:17:19 AM GMT

NEW YORK, Sept 9 (Reuters) - Industrial conglomerate Emerson Electric Co raised its 2010 earnings forecast on Thursday to reflect gains from recent asset sales and an acquisition, but said its underlying business expectations have not changed since its August earnings conference call.

Emerson said it now expects fiscal 2010 earnings per share of $2.70 per share to $2.85 per share, including 10 to 15 cents per share from two recent asset sales. Its earlier range had been $2.60 to $2.70.

Emerson last week completed its $1.5 billion acquisition of Britain's Chloride, a maker of power supply systems that it says will boost Emerson's geographical reach and expand its product offerings, leading to "synergies" both from cost savings and new sales opportunities.

Emerson is also selling its LANDesk Software business to private equity firm Thoma Bravo, having found a buyer for the technology services unit that was part of its 2009 acquisition of Avocent. And Nidec Corp said last month it will buy two of Emerson's motors businesses.

Those two divestitures will generate pretax proceeds of about $850 million, Emerson said.

Emerson Chief Executive David Farr said on a conference call the company would now focus on integrating Chloride and added he would not be surprised if Emerson spent less than $500 million in its 2011 fiscal year on acquisitions.

"I am not a serial acquirer," Farr told analysts. (Reporting by Nick Zieminski, editing by Gerald E. McCormick)

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