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Pall falls as company sounds cautious note

NEW YORK (AP) -- Shares of Pall Corp. fell Monday after the filtration equipment maker tamped down its expectations for the current fiscal year, saying its business is being hurt by the stronger dollar, lower demand from industry, and other issues.

THE SPARK: Pall is scheduled to make a presentation at an industrial conference in Chicago on Tuesday and the company released its presentation Monday. It said revenue will fall 3.5 to 4 percent in the first quarter, which suggests a total of $677 million to $681 million. Analysts, on average, were expecting $648.3 million in revenue, according to FactSet.

The dollar has gained strength relative to the euro and other currencies, which makes U.S.-made goods more expensive in other markets. Pall said the weaker Euro is affecting its results. The company said it expects the stronger dollar to cut its net income by 7 to 10 cents per share in the current fiscal year. Pall said it is "reassessing" its outlook for the fiscal year and may only achieve the low end of its previous guidance, which called for income of $3.05 to $3.25 per share.

Analysts expected Pall to earn $3.17 per share on average.

THE BIG PICTURE: Pall said its orders have fallen about 4 percent if changes in foreign currency exchange rates are excluded.

The company said issues affecting its results included weakness in industrial markets, a delayed recovery in the microelectronics sector, the weaker Euro, project delays in its process division, and delays related to construction in China.

THE ANALYSIS: Jefferies & Co. analyst Jon Wood said the company's guidance suggests demand from industrial markets weakened in the first quarter from the fourth quarter of fiscal 2012. He said shares of the Port Washington, N.Y., company are fairly valued, and maintained a "Hold" rating, with a price target of $58 per share.

SHARE ACTION: Shares of Pall lost $3.15, or 4.9 percent, to end Monday at $60.80. Pall stock had gained 27 percent since July 24.