(Corrects stock performance in last paragraph to make clear
that shares have risen, not fallen, this year)
ATLANTA Oct 18 Heating and cooling systems
maker American Standard Cos ASD.N reported a 5 percent
increase in quarterly operating profit on Thursday as
commercial demand for air conditioning offset weaker
But the results fell short of analysts' estimates and the
company cut its forecast for air conditioning results for the
full year, sending its shares lower.
American Standard, which is separating into three
businesses, reported third-quarter profit from continuing
operations of $129.2 million, or 63 cents a share, compared
with $123.1 million, or 60 cents a share, a year earlier.
The earnings exclude a loss from discontinued operations of
$67.3 million, or 34 cents a share, reflecting results from the
bath and kitchen business that is being sold and a
vehicle-controls unit that has been spun off.
Adjusted for operational consolidation expenses and certain
tax items, income from continuing operations was 65 cents a
share, American Standard said. On that basis, analysts, on
average, expected 69 cents a share, according to Reuters
Net income was $61.9 million, down from $150.9 million a
Sales from continuing operations rose 7.7 percent to $1.98
American Standard, which plans to change its name to Trane,
its flagship heating and air conditioning brand, later this
year, said strength in commercial air conditioning helped
compensate for residential sales that have been hurt by the
weak U.S. housing market.
The Piscataway, New Jersey-based company said it expects
full-year Trane segment income to be $35 million lower than its
July estimate, which equates to about 12 cents a share.
It forecast full-year earnings from continuing operations
of $1.89 to $1.94 per share. On an adjusted basis, it expects
to earn between $1.90 and $1.95 per share.
"Early indications are that commercial markets will be up
in '08, with residential flattish," Chief Financial Officer
Peter D'Aloia said during a conference call.
American Standard announced plans to separate into three
businesses in February. It expects the sale of its bath unit to
funds advised by private equity firm Bain Capital Partners LLC
to close at the end of this month. In July, the company's truck
parts business was spun off into a publicly traded company
called WABCO Holdings Inc (WBC.N).
American Standard shares were off 37 cents, or 1 percent,
to $33.93 in afternoon New York Stock Exchange trading. The
shares have risen 6 percent this year, compared with flat
performance in shares of rival Lennox International Inc
(Reporting by Karen Jacobs; additional reporting by Aarthi
Sivaraman and Sarah Coffey in New York)