* Q1 EPS $0.30 vs est $0.27
* Q1 rev falls 11 pct
* Says 2009 will be very challenging (Recasts; adds details, analyst comment, s share movement)
By Bhaswati Mukhopadhyay
BANGALORE, May 1 (Reuters) - Kaydon Corp (KDN.N), which makes specialty ball bearings for wind turbines, posted first-quarter results that beat market estimates, but said it expects 2009 to be a very challenging year.
Shares of the company fell $1.34 to $30.62 in afternoon trade Friday on the New York Stock Exchange. They had touched a low of $30.55 earlier in the session.
"The global recession has impacted each of our businesses to varying degrees," Chief Executive James O'Leary said.
Late last year Kaydon froze salaries, closed or eliminated a number of benefit programs, curtailed overtime, and cut jobs due to the weakening global economy.
End markets, such as wind energy, defense and medical, grew but at lower-than-expected rates due to the effects of the global financial crises, CEO O'Leary said in a statement.
Tight credit conditions impacted ultimate end users' ability to finance new projects in the wind energy market, resulting in deferrals or near-term cancellation of certain projects previously planned for 2009, the CEO said.
Analyst Eli Lustgarten of Longbow Research said as opposed to being a growth year, 2009 will be a flat to marginally up year for wind energy. He has a "neutral" rating on the stock.
For the first quarter, net income fell to $10.1 million, or 30 cents a share, from $15.3 million, or 52 cents a share, a year earlier. Revenue fell 11 percent to $110.3 million.
Analysts on average were expecting earnings of 27 cents a share, before special items, on revenue of $106.1 million, according to Reuters Estimates.
The stronger U.S. dollar and higher pension costs have hurt the company.
Sales at its friction control products -- the biggest segment -- fell 3 percent to $72.2 million. The segment produces specialty balls, anti-friction bearings, split roller bearings.
MRAPs (mine resistant ambush protected) are a good portion of Kaydon's friction control sales and it will flatten out for the year, Lustgarten said.
Businesses serving international markets, mainly Europe, experienced declines similar to a drop experienced in its North American end markets in the later half of 2008, the company said.
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