Emerson Q2 Results Miss View, Backs Full Year Forecast

(RTTNews) - Emerson Electric Co. (EMR), a diversified technology company, Tuesday reported lower profit and sales for the second quarter, which was impacted by unusual weather and weaker business investment. Both earnings and sales missed Wall Street expectations, but the company backed its full year forecast.

Emerson's Chairman and Chief Executive Officer David Farr said, "The second quarter results reflect several unanticipated external factors, including unusual weather and weaker business investment in the U.S., and a more cautious approach by customers on large global project execution."

Net earnings common shareholders slipped 2 percent to $547 million from $561 million in the previous year. Earnings per share were flat with last year at $0.77.

On average, 25 analysts polled by Thomson Reuters expected earnings of $0.81 per share. Analysts' estimates typically exclude special items.

Net sales slid 2 percent to $5.812 billion from $5.960 billion in the previous year. Analysts expected revenues of $5.90 billion.

Emerson said that the Artesyn divestiture deducted sales 5 percent and acquisitions added 1 percent.

According to the company, underlying sales were up 2 percent, as orders timing, disruptive winter weather and weak first quarter GDP growth in the U.S., and slower implementation of large projects in the global process industry hampered growth.

By geography, the U.S. grew 3 percent, Asia increased 4 percent, and climbed 9 percent including China. Europe grew 1 percent, while Middle East/Africa declined 9 percent following robust growth in the prior year.

Process Management net sales grew 4 percent to $2.108 billion, as global oil and gas, power, and chemical markets continued to support growth, although customers stretched out execution of large projects.

Industrial Automation sales increased 2 percent to $1.232 billion, as demand improved for capital goods, especially in emerging markets.

Network Power net sales decreased 21 percent to $1.171 billion, due to the divestiture of Artesyn.

Net sales in the Climate Technologies segment increased 5 percent to $1.041 billion, led by strength in global refrigeration markets, with transportation being especially robust.

Further, the company reaffirmed its earnings per share outlook of $3.68 to $3.80 on a reported basis. Analysts expect earnings of $3.77 per share.

Underlying sales growth is expected to be 3 to 5 percent and net sales negative 1 to 1 percent, reflecting completed acquisitions, divestitures, and currency translation.

EMR, which closed up 0.1 percent at $67.62 on Monday, added 2.8 percent in pre-market trading.