UPDATE 2-Emerson Electric raises full-year forecast on strong demand

* Raises FY adj EPS from cont ops to $2.58-$2.62 from $2.50-$2.60

* Q3 sales jump 10 pct

* Sees improving demand, economic conditions (Adds details, shares)

Aug 1 (Reuters) - Factory automation equipment maker Emerson Electric Co raised its full-year forecast, helped by improving orders and stabilizing demand from industries including oil and gas.

The company said it now expects fiscal 2017 adjusted earnings from continuing operations in the range of $2.58 to $2.62, up from its previous forecast of $2.50 to $2.60 per share.

Emerson said it expects net sales to be up about 5 percent from flat. The company expects underlying sales to be up 1 percent.

"As we enter the fourth quarter, we expect to see demand and economic conditions improve," Chief Executive David Farr said in a statement.

Net sales for the third quarter rose 10 percent to $4.04 billion, beating analysts' estimate of $4.03 billion, according to Thomson Reuters I/B/E/S.

Sales at its automation solutions business, its biggest, jumped 12.1 percent to $2.44 billion, helped in part by renewed activity in unconventional oil and gas, particularly in Western Canada.

The business makes valves and regulators for the oil and gas industry and had been struggling as customers curtailed spending due to a slump in oil prices.

Underlying sales in North America were up 6 percent led by energy related markets, Emerson said, adding that it anticipated bookings for larger projects in 2018.

Emerson has been shedding non-core businesses and has focused on growing its automation solutions business, along with commercial and residential heating and air conditioning businesses.

Earnings from continuing operations fell to $419 million, or 63 cents per share in the third quarter ended June 30, from $451 million, or 68 cents per share, a year earlier.

Excluding items, the company earned 68 cents per share from continuing operations, marginally missing analysts' estimate of 69 cents, according to Thomson Reuters I/B/E/S.

Shares of the company were marginally up at $59.90 on Tuesday morning. Up to Monday's close, the St. Louis, Missouri-based company's shares had risen 6.9 percent this year. (Reporting by Arunima Banerjee in Bengaluru; Editing by Supriya Kurane)