UPDATE 2-Oerlikon orders fall, eyes textiles pick-up

Author: Katie Reid

* 9-mths orders drop 35 percent, in line with forecasts

* Sees rising demand in textiles, coating, vacuum units

* Still targets return to operating profit in 2010

* Shares rise 4.1 percent, outperform Swiss mid-cap index

(Adds CEO comment, analyst, shares)

ZURICH, Oct 22 (Reuters) - Debt-laden Swiss technology group Oerlikon said it saw signs of a pick-up in its key textiles business but restructuring costs would continue to weigh on its bottom line.

The group posted on Thursday a 35 percent drop in nine-month order intake from a year ago, in line with forecasts, and said it was still aiming to return to operating profit in 2010.

Oerlikon, which makes a range of products from coatings used in Formula One racing cars to machines used to make solar cells, has been hit hard by the sharpest economic downturn in decades.

The group has launched several cost-cutting rounds and issued a series of disappointing figures this year, prompting major shareholder, Russian billionaire Viktor Vekselberg, to force out CEO Uwe Krueger and replace him with turnaround expert Hans Ziegler.

It had seen signs that demand was beginning to pick up again in its coating and vacuum units as well as textiles, it said.

By 0929 GMT, shares in the group were trading 4.1 percent stronger at 75.50 Swiss francs, outperforming a Swiss mid-cap index that fell 1 percent .

"Overall the results look encouraging, especially considering the revival of the textile business," said Vontobel analyst Michael Foeth, though the fact Oerlikon was only forecasting flat sales for its solar unit in 2010 was disappointing.

ASIA GROWTH

Order intake at Oerlikon's largest unit, textiles, rose 50 percent in the third quarter compared with the previous three months thanks to strong growth in Asia.

"While the first half of 2009 was influenced most heavily by increased demand due to government stimulus measures in China as well as the realisation of delayed orders, new projects are now also being commissioned," the group said.

"Oerlikon Group confirms its goal of returning to profitability on operational basis in 2010. However high financing and restructuring costs will continue to impact net profit adversely."

CEO Ziegler declined to say when Oerlikon would return to profit at net level.

Oerlikon is looking to sell business units to raise cash to alleviate the debt it took on to pay for the acquisition of textile machinery and car parts maker Saurer in 2006.

The group expects to make an announcement on how it will raise cash by the end of the year.

(Editing by Elaine Hardcastle, John Stonestreet)

($1=1.011 Swiss Franc)