By Scott Malone

The maker of systems to help factories run more smoothly said on Monday demand was down in almost all industries it serves -- from automakers to metals companies -- and across its core U.S. and European markets.

Rockwell expects full-year profit of $1.55 to $2.25 per share, well below its $3.10-to-$3.60 target set in November.

"We see a significant deceleration in customer demand," Chief Executive Keith Nosbusch told investors on a conference call. "What is clear is that we have not seen the bottom yet."

The company expects its second fiscal quarter -- which began this month -- to be "very difficult," he said, as a result of rapidly falling sales. Rockwell forecast overall revenue would fall 12 percent to 17 percent this year.

The Milwaukee-based company's shares fell $3.03 to $23.01 on the New York Stock Exchange. Earlier they had touched $20.29, their lowest point since early 2003.

"Investors were bracing for the worst -- they got it, and then some," JPMorgan analyst Stephen Tusa wrote in a note to clients.

Merrill Lynch analyst John Inch said the magnitude of the outlook cut suggested that Rockwell's annual earnings per share could "possibly" fall below $1 before the recession ends.

"We think this result bodes poorly for other automation suppliers," Inch said. He cited Emerson Electric Co , which is due to report results on Tuesday. Emerson's shares fell 5 percent.

FOCUS ON COST-CUTTING

Across the economy, companies are slashing their spending plans as they adapt to the sharpest downturn in decades. Just last week, diversified manufacturers 3M Co , Caterpillar Inc and Textron Inc said they were cutting their 2009 capital budgets.

Rockwell has already taken restructuring steps that will cut its costs this year by about $240 million and aims to save another $50 million to $100 million through additional efforts.

"It is now clear that we need to aggressively continue to reduce our costs and restructure our businesses," Nosbusch said.

In September, Rockwell said it would lay off about 600 people. The company does not anticipate additional cuts of that magnitude, Nosbusch said in an interview, but anticipates more scattered layoffs and has frozen all hiring, shortened work weeks at some facilities and stopped all raises this year.

PROFIT TUMBLES 24 PERCENT

Net income fell to $118.4 million, or 83 cents per share, in the first quarter, ended on December 31, from $156.6 million, or $1.04 per share, a year earlier.

Revenue fell 10.7 percent to $1.19 billion.

Nosbusch said he sees isolated bright spots ahead. Rockwell's sales of equipment to oil and gas companies -- who have held their capital budgets steady -- are forecast to continue to grow. It also expects its growth in China, which slowed sharply in the first quarter, to accelerate through the rest of the year.

Rockwell's main rivals include Japan's Mitsubishi Electric Corp <6503.T> and Germany's Siemens AG .

Rockwell shares have fallen about 55 percent over the past year, a sharper drop than the 49 percent slide of the Standard & Poor's capital goods industry index <.GSPIC>.

(Reporting by Scott Malone; Editing by Lisa Von Ahn and Brian Moss)