Diversified global technology company Emerson Electric Co. (EMR) reported Tuesday a profit for the second quarter that grew three percent from last year, reflecting improved margins and growth at process management and climate technologies. Both earnings per share and quarterly revenues missed analysts' expectations. The company also trimmed its forecast for full-year 2013.
"In light of the current business environment, I was pleased with our underlying growth, especially in emerging markets, which grew 6 percent. We will continue to target investment in growing regions, while remaining cautious in mature markets until the economy accelerates," Chairman and CEO David Farr said in a statement.
St. Louis, Missouri-based Emerson reported net earnings of $561 million or $0.77 per share for the second quarter, higher than $545 million or $0.74 per share in the prior-year quarter.
On average, 25 analysts polled by Thomson Reuters expected the company to report earnings of $0.78 per share for the second quarter. Analysts' estimate typically exclude special items.
Net sales for the quarter increased 1 percent to $5.96 billion from $5.92 billion in the same quarter last year, but missed twenty Wall Street analysts' consensus estimate of $6.03 billion.
Underlying sales also grew 2 percent, with the U.S. sales up 1 percent, and Asia sales growing 2 percent, while Europe sales declined 3 percent. Unfavorable currency translation and divestitures together deducted 1 percent.
The company noted that sales reflected mixed results across end markets and geographies, but slow economic growth overall as business investment stalled, mainly in mature markets.
Process management sales for the quarter grew 8 percent to $2.02 billion from last year. Sales for industrial automation were $1.21 billion, down 6 percent from the previous year, and network power sales declined 4 percent to $1.48 billion from the year-ago quarter.
Climate technologies sales totaled $988 million, up 7 percent from last year, while sales for commercial & residential solutions declined 4 percent to $457 million from a year ago.
Pre-tax earnings margin for the quarter improved 10 basis points to 13.9 percent from last year's 13.8 percent.
Looking ahead to full year 2013, Emerson lowered its earnings guidance to a range of $3.48 to 3.58 per share from the prior forecast of $3.53 to 3.63 per share, and cut reported and underlying sales growth guidance between 1.5 and 2.5 percent from the previous forecast of 2 to 5 percent.
Street currently is looking for full-year 2013 earnings of $3.59 per share on annual revenues of $25.18 billion.
"Economies around the world are struggling for momentum. Demand slowed in the second half of the quarter as overall global business confidence deteriorated. We do not see a catalyst to economic growth over the next six to nine months," Farr added.
EMR closed Monday's regular trading session at $57.30, up $0.46 on a volume of 4.55 million shares. In the past 52-week period, the stock has been trading in a range of $43.59 to $58.67.
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