UPDATE 3-Rockwell Auto 2011 profit target above Street view

Tue Nov 9, 2010 11:47am EST

* Sees fiscal year 2011 earnings per share $3.80-$4.20

* Growth coming in Asia, Latin America, auto industry

* Q4 earnings per share $0.91, meets Wall Street view

* CEO says growth will slow in 2011

* Shares up 1 percent (Adds stock action, CEO comment from interview)

By Scott Malone

BOSTON, Nov 9 (Reuters) - Rockwell Automation Inc (ROK.N) set a 2011 profit forecast above Wall Street's expectations, saying a recovering economy will spur demand for its systems, which help factories run more smoothly.

The U.S. company expects factory activity, a big source of demand for its products, to rise at a slower place next year.

"While it won't be as high as in 2011 as it was in 2010, it will still be positive," Chief Executive Keith Nosbusch said in a phone interview on Tuesday.

He said Rockwell expects the emerging economies of Asia and Latin America to grow at about triple the pace of the United States. Within the United States, the company is looking for continuing strong demand from the major automakers including Ford Motor Co (F.N) and General Motors Co [GM.UL], which are spending more on automation equipment, but halting capital projects over the past two years.

Rockwell, whose fiscal year ended on Sept. 30, said on Tuesday it expects to earn $3.80 per share to $4.20 per share in the current year, more than the $3.76 per share analysts expected, according to Thomson Reuters I/B/E/S.

At its midpoint, Rockwell's 2011 forecast would represent a 31 percent growth rate.

It expects revenue to rise 8 percent to 12 percent to a range of $5.3 billion to $5.5 billion.

"We believe the organic revenue guidance looks reasonable," said Deutsche Bank analyst Nigel Coe. "We have already baked in 12 percent organic growth. However, implied incremental margins look a bit aggressive."

Fellow industrial Tyco International (TYC.N), which also ends its fiscal year in September, set an initial 2011 earnings per share target that at its midpoint would represent 8 percent growth. [ID:nN09266361]

Aircraft supplier Rockwell Collins (COL.N), which Rockwell Automation spun off in 2001 and is also on a September fiscal year, has set a 2011 profit target that calls for roughly 9 percent earnings growth.

Other U.S. manufacturers, including General Electric Co (GE.N), United Technologies Corp (UTX.N) and 3M Co (MMM.N), spell out their 2011 forecasts next month.

Rockwell shares rose almost 1 percent to $66.94 on the New York Stock Exchange.

QUARTER MEETS ANALYST VIEW

Rockwell said fiscal fourth-quarter profit came to $131.3 million, or 91 cents per diluted share, more than four times the prior year's $28.9 million, or 20 cents per share. The fourth-quarter result included a $150 million contribution to the company's pension plan.

The reported profit met analysts' average forecasts.

Revenue rose 26 percent to $1.36 billion.

The Milwaukee-based company is seeing rising demand as manufacturers, which slashed their capital spending budgets during the recession, resumed investing in automation systems that can help cut the cost of running their factories. Its rivals include Emerson Electric Co (EMR.N), Germany's Siemens AG (SIEGn.DE) and Japan's Mitsubishi Electric Corp (6503.T).

As of Monday's close, Rockwell shares were up about 41 percent for the year, more than double the 18 percent rise of the Standard & Poor's capital goods industry index .GSPIC. (Reporting by Scott Malone. Editing by Gerald E. McCormick and Robert MacMillan)