UPDATE 1-Eaton slashes Q4 outlook as crisis hits end markets

DETROIT, Dec 16 (Reuters) - Diversified U.S. manufacturer Eaton Corp (ETN.N) slashed its fourth-quarter profit forecast and said it expects its end markets could decline by about 7 percent in 2009, citing the impact of the global economic crisis.

The Cleveland-based company said it now expects operating earnings per share for the fourth quarter - which excludes charges related to the integration of recent acquisitions - within a range of $1.00 and $1.10, down dramatically from its last forecast given on Oct 20 of a range between $1.70 and $1.80.

Eaton said it expects net earnings per share in a range from 90 cents and $1.00.

Wall Street analysts' average forecast is for $1.69 per share for the quarter.

The company said that when it made its last forecast in October, it had expected its end markets to be flat in the fourth quarter over the same period in 2007. This was based on the assumption that the U.S. economy would decline by 2 percent in the quarter, with a smaller drop in the European Union.

"Recent economic events now suggest that GDP in the U.S. and the European Union will experience much greater declines," Eaton said in a statement.

The company said it anticipates its end markets will decline by between 3 percent and 4 percent in the fourth quarter.

"We expect weak global economic conditions to persist throughout 2009," Eaton added.

Eaton said revenue in 2009 will be impact by the decline in most currencies against the U.S. dollar, which could reduce revenue by between 5 percent and 6 percent versus 2008.

The company said that during 2008 it reduced its workforce by 3,400 employees. This plus planned cost-cutting actions should generate a pre-tax benefit of $125 million in 2009, Eaton said.

(Reporting by Nick Carey, editing by Dave Zimmerman)