Emerson Q3 Profit Slumps - Quick Facts

(RTTNews) - Diversified global technology company Emerson Electric Co. (EMR) reported a significant plunge in third-quarter net earnings to common shareholders to $194 million, or $0.27 a share, from last year's $770 million, or $1.04 a share. On average, 25 analysts polled by Thomson Reuters expected earnings per share of $0.98 for the quarter. Analysts' estimates typically exclude one-time items.

St. Louis, Missouri-based company's quarterly earnings before income taxes fell 56% year-over-year to $511 million.

The firm clocked net sales of $6.34 billion for the third quarter, down 2 percent from $6.48 billion in the previous year, reflecting a sluggish economic environment and difficult comparisons, as recovery from the Thailand flooding drove robust third quarter sales in the prior year. Analysts estimated revenues of $6.44 billion for the quarter. Underlying sales slid 1 percent, as divestitures deducted 1 percent and currency translation had a negligible impact, with the U.S. down 3 percent, Asia down 3 percent, and Europe down 6 percent. Emerging market growth of 2 percent was more than offset by weaker demand in mature economies, the company added.

The company said 2013 earnings per share are trending toward the lower end of the $3.48 - $3.55 range, excluding the goodwill and tax charges on the embedded computing and power business, or $2.78 - $2.85 including charges. Full-year reported and underlying sales growth are likely to be about 1 percent, slightly lower than the prior view, with EBIT and pretax margin approximately equal to last year. Analysts project annual earnings of $3.49 per share.

Separately, Emerson announced a deal to sell a 51 percent stake in its embedded computing and power business to Platinum Equity. Emerson would receive about $300 million cash and would retain a 49 percent noncontrolling stake in the business, which would operate as an independent company. Further, the share buyback would be increased by $600 million to offset associated earnings dilution.

The transaction may close in nearly three to six months, upon securing regulatory approvals in various countries. Following the transaction closure, Emerson's interest in the new entity would be reported using the equity method of accounting.