Invensys says first quarter trading met expectations

LONDON (Reuters) - Engineering firm Invensys (ISYS.L) said it traded in line with its own expectations in the three months to June 30, easing concerns over a sales downturn in the United States and sending its shares higher.

Invensys, which rejoined the FTSE 100 last month after being forced out following a financial crisis in 2003, said its process systems and rail divisions had a strong pipeline of potential orders.

The company also predicted its controls unit, which makes thermostats for household appliances, would maintain its trading performance despite difficult conditions in the U.S., where sales have been hit by a slumping property market.

"This statement should cheer people up because it reiterates what they've said. There's absolutely no reason why we'd expect earnings to fall," said MF Global analyst Andy Chambers.

By 10 a.m., Invensys shares were up 2 percent at 266 pence, while the FTSE 100 share index was 0.5 percent lower.

Prior to Friday's statement, the stock had fallen 18 percent since the beginning of June, with the decline accelerating after U.S. rival Rockwell Automation (ROK.N) issued a profit warning on June 25.

London-based Invensys added that a new 400 million pound banking facility, agreed on Wednesday, would help it make bolt-on acquisitions to boost its rail and process systems businesses.

The company also said it is currently free of debt after paying off a 155 million pound loan in May, and holds a net cash balance of about 200 million pounds.

The new financing agreement saw the final removal of restrictions, including a 20 million pound limit on takeovers and a ban on dividend payments, imposed as part of a financial restructuring package negotiated in 2003.