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RELIANCE ELECTRIC TO MISS EARNINGS ESTIMATE

 CLEVELAND, June 15 /PRNewswire/ -- Reliance Electric Company (NYSE:REE) today announced that it expects earnings for the second quarter to be below analysts' estimates.
 "While earnings per share (before extraordinary charges) will be up over last year reflecting significantly lower interest expense, we expect second quarter earnings to be below currently published analysts' estimates," stated John C. Morley, president and chief executive officer of Reliance Electric Company. "The level of economic activity year-to- date has certainly been below our expectations and signs of a second- half pickup have yet to materialize. Over the last six weeks, our cautious outlook has become more guarded with an increasingly uncertain view of the overall economy."
 "Despite year-over-year order and revenue growth, an unfavorable mix in our industrial sector continues to pressure margins and earnings. While our industrial motor, control and power transmission products are showing year-to-year gains, the demand for engineered products and systems remains sluggish with some domestic weakening. Our industrial customers are willing to make maintenance-related expenditures but are still hesitant to commit funds for large capital projects," continued Morley. "Unless confidence in the economy improves near term, we will not be able to reach analysts' earnings estimates for the year."
 Morley added that "We are aggressively reducing costs to maximize our near and long-term operating leverage but these actions are not expected to offset the negative impact of a weaker economy on full-year earnings. The continued funding of key product development initiatives in our telecommunications sector to capitalize on the superior growth opportunities present in that market will also add pressure on near term earnings."
 In the prior year Reliance reported second quarter earnings, before extraordinary items, of $.18 per share (restated). Analysts' estimates for the second quarter of 1993 are between $.28 and $.32 per share. The company expects to release financial results for the quarter and six- month period, which ends June 30, 1993, on July 19, 1993.
 Reliance Electric Company, headquartered in Cleveland, designs, manufactures, sells and services a broad range of industrial and telecommunications equipment and has annual sales in excess of $1.5 billion. Reliance operates 47 manufacturing plants worldwide in nine countries, and employs approximately 14,000 people.
 -0- 6/15/93
 /CONTACT: P. Kelly Tompkins of Reliance Electric Company, 216-266-5809/
 (REE)


CO: Reliance Electric Company ST: Ohio IN: MFG TLS SU: ERP

BM -- CL006 -- 1951 06/15/93 08:34 EDT
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Publication:PR Newswire
Date:Jun 15, 1993
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