Emerson Q1 Adj. Profit Meets Estimates, Revenues Top; Backs 2014 Outlook

(RTTNews) - Diversified global technology company Emerson Electric Co. (EMR) reported Tuesday a profit for the first quarter that grew 2 percent from last year, reflecting sales growth at four of its five business operations. Adjusted earnings per share matched analysts' expectations, while quarterly revenues topped their estimates. The company also maintained its earnings and revenue growth forecast for the full-year 2014.

"Growth was consistent with the modest pace of orders improvement we have seen over the last quarter, which unfolded consistent with expectations. Although uneven across markets, overall global demand reflects slowly improving business confidence and macroeconomic momentum, particularly in Europe," Chairman and CEO David Farr said.

St. Louis, Missouri-based Emerson reported net earnings of $462 million or $0.65 per share for the first quarter, higher than $454 million or $0.62 per share in the prior-year quarter. Excluding $0.02 of acquisition costs, adjusted earnings for the latest quarter was $0.67 per share.

On average, 26 analysts polled by Thomson Reuters expected the company to report earnings of $0.67 per share for the quarter. Analysts' estimate typically exclude special items.

Net sales for the quarter increased 1 percent to $5.61 billion from $5.55 billion in the same quarter last year, and topped twenty-two Wall Street analysts' consensus estimate of $5.55 billion.

Underlying sales grew 3 percent as divestitures deducted 3 percent and acquisitions added 1 percent.

The company noted that global market conditions reflected slowly improving business investment with mixed demand among industries, as the U.S. grew 3 percent, Asia grew 10 percent, and Europe was flat. Emerging markets grew 7 percent, led by a 14 percent increase in China and strength across all business segments.

Process management sales for the quarter grew 8 percent to $2.04 billion from last year. Sales for industrial automation were $1.15 billion, up 1 percent from the previous year, while network power sales declined 11 percent to $1.30 billion from the year-ago quarter.

Climate technologies sales totaled $786 million, up 5 percent from last year's $752 million, and sales for commercial & residential solutions increased 3 percent to $466 million from last year's $453 million.

Looking ahead to fiscal 2014, Emerson continues to expect adjusted earnings in a range of $3.68 to $3.80 per share, on projected underlying sales growth of 3 to 5 percent. Street currently is looking for full-year 2014 earnings of $3.81 per share on annual revenues of $24.82 billion.

The company noted that margin is expected to improve about half a percent to reflect the benefits from portfolio changes and volume leverage, partially offset by accelerated strategic investments.

"We continue to see encouraging progress on strategic growth initiatives - especially in emerging markets - with promising opportunities for further investment," Farr added.

EMR closed Monday's regular trading session at $64.25, down $1.61 on a volume of 4.71 million shares. In the past 52-week period, the stock has been trading in a range of $53.09 to $70.66.