(Adds comments on weak dollar, share price)
By Daniel Morrissey
LONDON, Nov 20 (Reuters) - British engineering firm Tomkins Plc met forecasts on Thursday with a six-percent rise in third-quarter operating profit and said a restructuring had put it on track to make the most of any improvement in its markets.
Tomkins, which makes more than two thirds of its sales in the United States, has been hit by a slow recovery in demand for its products there and a weakening of the dollar against other major currencies.
It said it did not anticipate any significant changes to its markets this year but that its restructuring would have a "positive impact upon the group in 2004 and beyond".
"However, there will be a continuing translation impact on the fourth quarter results given the renewed weakness of the U.S. dollar against sterling," Tomkins said in a statement.
Operating profit before exceptional items and goodwill amortisation for the three months to the end of September was 74.4 million pounds ($126.4 million). Analysts had forecast between 70 million and 77 million pounds for the quarter.
Shares in Tomkins were up 1.8 percent at 271-1/4 pence in early trading. Investors have welcomed the restructuring and some recent signs of a recovery in the United States, boosting its share price by around 44 percent since March. It has also outperformed the FTSE 100 Index by about 24 percent.
The company has cut more than 3,000 jobs as it restructured operations and sold some non-core businesses in the past three years. Tomkins is targeting further cost savings of 50 million pounds in 2004 from its restructuring programme.
Sales rose by 5.2 percent to 820.3 million pounds after solid growth in its industrial and automotive business and a stronger U.S. residential construction market. A recovery in margins in air system components also helped operating profit.
Tomkins, whose wide range of products include automotive parts and industrial power systems, said this year it expected North America to be tough but hoped for better times in 2004.
"Regardless of whether our end markets improve in 2004, Tomkins will be a better company because of our focus upon product and process innovation, manufacturing excellence and global expansion," Chief Executive Jim Nicol said.