UPDATE 4-SPX cuts profit forecast, expects to lag economy

* Q3 EPS of $0.98 ex-items tops 82 cent consensus

* Revenue falls 20.8 pct to $1.17 bln

* Cuts 2009 EPS view to $3.80-$4.00

* CEO warns expects "to lag the broader economy"

* Shares down as much as 12 pct (Adds CEO quotes, details, updates stock action)

By Scott Malone

BOSTON, Oct 28 (Reuters) - Diversified U.S. manufacturer SPX Corp (SPW.N) cut its earnings forecast for the rest of the year, saying that it expects to trail the global economy and sending its shares down as much as 12 percent.

The maker of cooling towers used in power plants and fluid-control systems warned on Wednesday that developers of big infrastructure projects were delaying orders of its equipment, and noted that weak demand was pushing down prices of its transformers.

"While some macroeconomic trends appear to be pointing toward the beginning of a recovery, it's important to point out that the majority of our businesses are later cycle. As such we expect our recovery to lag the broader economy," Chief Executive Chris Kearney told investors on a conference call.

The Charlotte, North Carolina-based company set a fourth-quarter profit per share target of $1.25 to $1.45, well below analysts' average forecast of $1.60 per share, according to Thomson Reuters I/B/E/S.

Concerns about its outlook overshadowed third-quarter results that handily exceeded Wall Street's expectations, as lower than forecast restructuring costs and better than expected margins in some segments boosted its bottom line.

SPX shares were down $7.00 or 11.5 percent at $53.70 in midday trading on the New York Stock Exchange. Earlier they had reached $53.08, their lowest level since August.

TRANSFORMER TROUBLE

Falling demand has pushed the prices of electrical transformers down about 25 percent from their peak, a trend the company expects to continue into next year, Chief Financial Officer Patrick O'Leary said. It will take another quarter or two to determine whether the new lower prices are going to stick, he said.

"SPX is forecasting a significant step-down in industrial margins ... on weaker transformer pricing, which is a key fear for the bears and creates downside risk to 2010," wrote Deutsche Bank analyst Nigel Coe, in a note to clients.

Its rivals in transformers include Swiss engineering group ABB Ltd (ABBN.VX) and electrical products and tool maker Cooper Industries Plc (CBE.N).