Emerson Q2 Profit Surges 78%, But Slashes 2015 Outlook - Quick Facts

(RTTNews) - Diversified technology company Emerson Electric Co. (EMR) reported that second-quarter net earnings attributable to common shareholders surged to $973 million or $1.42 per share from $547 million or $0.77 per share in the prior-year quarter.

Excluding a $0.77 gain on the sale of the power transmission solutions business, adjusted earnings for the latest quarter was $0.65 per share.

On average, 24 analysts polled by Thomson Reuters expected the company to report earnings of $0.76 per share for the quarter. Analysts' estimates typically exclude special items.

The company said profitability declined reflecting volume deleverage, unfavorable mix, and higher costs related to increased strategic investment spending in the prior year.

Net sales for the quarter decreased 7 percent to $5.40 billion from $5.81 billion in the same quarter last year. Analysts estimated sales of $5.42 billion for the quarter.

Underlying sales remained flat, excluding unfavorable currency translation of 5 percent and an impact from divestitures of 2 percent.

As a result of the rapid weakening of both orders and sales in the second quarter, the company said it will further accelerate restructuring. For the first half of the fiscal year, restructuring totaled $53 million and restructuring is now expected to exceed $140 million for the full year.

Looking ahead to fiscal 2015, the company slashed its earnings guidance to a range of $4.17 to $4.32 per share from the prior forecast range of $4.50 to $4.60 per share. The outlook now includes a significant reduction from currency translation, the power transmission solutions divestiture gain of $0.77 per share, and accelerated restructuring costs of $0.09 per share.

The company also now projects net sales to decline 7 to 5 percent, with underlying sales growth of 0 to 2 percent, excluding a negative impact from currency translation of approximately 5 percent and a 2 percent deduction from divestitures.

The company previously expected sales to decline 1 to 4 percent, with 3 to 5 percent underlying sales growth.

Street is currently looking for full-year 2015 earnings of $3.66 per share on annual revenue decline of 5.5 percent to $23.18 billion.