Diversified global technology company Emerson Electric Co. (EMR) reported Tuesday a decline in profit for the first quarter, reflecting mainly lower sales in most of its segments. However, the company recorded improved gross profit margin, helped by its cost reduction initiatives and restructuring benefits during the period. Revenue as well as earnings per share exceeded analysts' expectations. The St. Louis, Missouri-based company's net earnings attributable to common stockholders declined to $425 million or $0.56 per share from $458 million or $0.60 per share in the previous year. On average, 18 analysts polled by Thomson Reuters expected the company to report earnings of $0.42 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter declined 7% to $5.01 billion from $5.42 billion in the same quarter last year. Thirteen analysts had a consensus revenue estimate of $4.69 billion for the quarter. Underlying sales during the quarter dropped 13%, which excludes a 3% favorable impact each from currency exchange rates and acquisitions. Underlying sales in emerging markets declined only 4% , supported by a 4% growth in Asia, compared to a decline of 18% in mature markets. Segment-wise, revenues from Process Management decreased 9% to $1.38 billion from $1.53 billion reported in the same period preceding year. Underlying sales in the segment dropped 17% against tough comparisons in the year-ago period. Industrial Automation revenues dropped 21% to $876 million from $1.1 billion in the prior year period. The company noted that underlying sales during the period dropped 28%, while currency added 4% and acquisitions added 3%. In October, Emerson had completed the acquisition of SSB Wind Systems. For the first quarter, Network Power segment sales decreased 5% to $1.38 billion from $1.46 billion in the year earlier. Results include an underlying sales decline of 10%, a 3% favorable impact from currency and a 2% favorable impact from the acquisition of Avocent. The company completed the acquisition of Avocent Corp. on December 11, 2009 and it is being integrated into the Network Power business. Sales from Climate Technologies grew 13% to $784 million from $692 million a year ago. Underlying sales in the segment increased 7%, acquisitions added 3% and currency added 3% during the quarter. Appliance and Tools division posted revenues of $731 million, lower than $771 million in the same quarter a year ago, which included underlying sales decrease of 7% and a 1% favorable impact each from currency translation and acquisitions.
Despite lower sales, gross profit margin improved 110 basis points to 38% and operating profit margin remained same with the prior year at 14.8%. The company noted that the margins were impacted positively by cost reduction initiatives and restructuring benefits during the period. David Farr, chairman, chief executive officer and president said, "Considering the continuing economic pressures, this was a solid quarter and an encouraging start for 2010. Our margin improvement demonstrates that we are doing the right things to drive global best cost and increase shareholder value. To successfully manage through the uncertain economic conditions that remain in most of our markets, we are focused on accelerating new product programs, investing in emerging markets, and making strategic acquisitions in our core and adjacent markets. This is positioning us for sustainable sales and profit improvements as global economic conditions improve."
For the fourth quarter, company had reported net income of $506 million, down from $688 million in the year ago quarter. Per share earnings fell 24% to $0.67 from $0.88 in the same quarter of last year. Quarterly net sales totaled $5.32 billion, a decline of 21%, compared to the previous year's net sales of $6.69 billion.
Looking ahead to fiscal 2010, Emerson expects earnings to be in the range of $2.20 to $2.40 per share, which includes the impact of the Avocent acquisition. The company added that the estimate is based on an anticipated underlying sales decline in the range of negative 3% to negative 6%. Earlier, underlying sales were expected to be down 5% - 7%. Emerson currently estimates a 2% favorable impact from currency translation and a 4% favorable impact from acquisitions resulting in reported sales which are flat to up 3%, or $20.9 billion to $21.5 billion for fiscal 2010.
Analysts expect the company to report earnings of $2.11 per share on revenues of $20.58 billion for fiscal 2010. Among Emerson's rivals, ABB Ltd. (ABB) is scheduled to release its fourth-quarter results on February 18. Analysts currently expect the company to report earnings of $0.27 per share on revenues $8.31 billion for the fourth quarter. EMR closed Monday's regular trading at $42.48 on the NYSE. In the past 52 weeks, the shares have been trading in a range of $24.39-$45.55, with an average three-month volume of 3.82 million shares.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.