Emerging markets key for Emerson climate tech unit

By Nick Zieminski

NEW YORK, Jan 25 (Reuters) - Constantly changing business conditions -- when India and China heat up, the U.S. housing business slows to a crawl -- make juggling one of Tom Bettcher's key job descriptions.

Managing often-conflicting business trends is all part of a day's work for Bettcher, the business leader of Emerson Electric Co's (EMR.N: Quote, Profile, Research) Climate Technologies division.

The $3.6 billion division makes components used in heating, ventilation and air conditioning (HVAC) equipment for customers like United Technologies Corp's (UTX.N: Quote, Profile, Research) Carrier unit, Johnson Controls Inc's (JCI.N: Quote, Profile, Research) York division, and Trane Inc (TT.N: Quote, Profile, Research), which is being bought by Ingersoll-Rand Co Ltd (IR.N: Quote, Profile, Research).

Compressors, the heart of an air conditioning unit, make up the bulk of its sales.

The division's ability to grow sales and profits at a time when its biggest market -- North American residential -- is declining illustrates how industrial companies have transformed in recent years, and why many U.S. multinationals are still promising double-digit earnings growth for 2008.

"Emerging markets are huge for us," Bettcher told Reuters at an industry trade show in New York this week. Demographic trends support long-term growth, he said, as does the push toward a more efficient use of energy.

The U.S. was responsible for 57 percent of division sales last year, but that ratio is expected to tighten in 2008. Housing starts, a leading indicator of demand for home air conditioners, suggest 2008 will be worse than 2007.

"It would be nice to say we had a tough year in '07; now we're going to bounce back," Bettcher said. "None of us are expecting that."