February 23, 2010 / 6:21 PM / 8 years ago

UPDATE 2-Federal Signal Q4 profit tops Street

* Q4 EPS of $0.18 from cont ops vs est $0.12

* Q4 sales fall 11 pct

* Sees challenging rev trend for first-half 2010

* Says rev trend to lag order trend (Adds background, conf call details and updates share movement)

BANGALORE, Feb 23 (Reuters) - Diversified manufacturer Federal Signal Corp FSS.N posted a quarterly profit that comfortably beat market estimates, but said a substantially lower backlog would hurt its revenue growth in the first half of 2010.

At the end of Dec. 31, backlog across its three business segments was $174.8 million, down from $290.2 million a year earlier.

For the latest quarter, two out of the company’s three businesses saw orders declining 10 percent to 16 percent from a year ago.

However, Chief Executive Bill Osborne said in a conference call that the company expected orders to grow in the first quarter of 2010 and for the full year.

“Our January orders were well above from those last year, in both municipal and industrial markets,” he said, adding that the company expects to see a stronger revenue trend resuming in the second-half of the year as orders build and the backlog drawdown becomes less significant.

However, Osborne refused to comment on Federal Signal’s proposed acquisition of Sirit Inc SI.TO, a day after the Canadian company received a rival offer.

On Feb. 22, Federal Signal raised its offer for the RFID technology provider to about $69 million, up from its January offer of $48 million. [ID:nSGE61L0JP]

Q4 TOPS STREET VIEW:

For the fourth-quarter ended Dec 31, the company beat the consensus view, boosted by a combination of lower operating expenses and greater demand for its fire rescue platforms.

In the latest quarter, the maker of security systems and street sweepers posted net income of $22.7 million, or 46 cents a share, compared with a net loss of $11.2 million, or 23 cents a share a year earlier.

The company earned 18 cents a share from continuing operations, beating analysts’ expectations of 12 cents a share.

Operating expenses for the quarter fell 20 percent to $39.5 million, while revenue from its fire rescue segment jumped 11 percent to $58.6 million.

Quarterly sales, which declined 11 percent to $206 million, also topped the consensus view, according to Thomson Reuters I/B/E/S.

Shares of the Oak Hill, Illinois-based company were 8 cents at $7.21, in mid-morning trade on the New York Stock Exchange. (Reporting by Biswarup Gooptu in Bangalore; Editing by Gopakumar Warrier and Anil D‘Silva)

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