Emerson Electric Q4 Profit Falls, Adj. Earnings Top Estimates

(RTTNews) - Emerson Electric Co. (EMR), a diversified technology company, Tuesday reported a fall in the fourth-quarter profit, amid flat sales and goodwill impairment. Adjusted earnings topped analysts' expectations, while revenues matched view.

Chairman and Chief Executive Officer David Farr said, "...Once again, global business investment struggled to sustain momentum, with growth fading through the year as economic uncertainty increased."

For the fourth quarter, net earnings attributable to shareholders declined to $410 million or $0.58 per share from $795 million or $1.10 per share in the previous year.

For the recent quarter, the company recorded non-cash pre-tax impairment charge of $508 million or $0.72 per share, related to Chloride business.

Emerson noted that weak economic growth in Europe has persisted since Chloride was acquired in 2010, and that expectations are low for European economic improvement in the next two to three years.

Excluding charges, adjusted earnings were $1.30 per share, while the firm posted $1.18 per share last year.

On average, 24 analysts polled by Thomson Reuters expected earnings of $1.23 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter edged down to $6.807 billion from $6.812 billion last year, while underlying sales grew 4 percent, which was offset by divestitures and currency translation. Analysts expected sales of $6.81 billion.

Underlying sales increased in all segments, with the strongest growth in Climate Technologies, Emerson said.

For fiscal 2014, net earnings to shareholders increased to $2.15 billion or $3.03 per share from $2.00 billion or $2.76 per share in the prior year. Annual net sales edged down 1 percent to $24.54 billion.

Looking ahead to fiscal 2015, the company said 9 percent increase in underlying orders in the quarter, and year-end backlog of $6.7 billion support the outlook for improved underlying sales growth in the near term.

Based on current conditions, underlying sales are expected to grow between 4 and 5 percent next year, better than in 2014, with unfavorable currency translation and the potential power transmission divestiture deducting 2 percent each, for a reported sales change of 0 to 1 percent.

For fiscal 2015, profitability is expected to continue to improve modestly.

EMR closed Monday's trading at $64.51.