WASHINGTON (dpa-AFX) - Diversified global technology company Emerson Electric Co. (EMR) reported Tuesday a profit for the first quarter that dropped 23 percent from last year, hurt by lower operating margins and a sales drop amid supply chain disruptions due to Thailand flooding.
Earnings per share for the quarter missed analysts' expectations by a penny, while quarterly revenues topped estimates by a whisker. The company also trimmed its earnings and revenue forecast for the full-year 2012.
'It was a very difficult first quarter of the new fiscal year. Given the momentum from our record performance in the fourth quarter of 2011, we expected to get the year off to a better start. Unfortunately, the headwinds were too strong and numerous to overcome,' Chairman and CEO David Farr said in a statement.
St. Louis, Missouri-based Emerson reported net earnings of $371 million or $0.50 per share for the first quarter, lower than $480 million or $0.63 per share in the prior-year quarter.
On average, 21 analysts polled by Thomson Reuters expected the company to report earnings of $0.51 per share for the first quarter. Analysts' estimate typically exclude special items.
Net sales for the quarter decreased 4 percent to $5.31 billion from $5.54 billion in the same quarter last year, but topped seventeen Wall Street analysts' consensus estimate of $5.29 billion by a whisker.
Underlying sales also declined 4 percent, with the U.S. down 4 percent and total international sales down 3 percent.
Process management sales for the quarter edged down 1 percent to $1.53 billion from last year. Restricted availability of electronics components caused by supply chain disruption due to flooding in Thailand significantly affected results.
Sales for industrial automation were $1.23 billion, up 2 percent from $1.21 billion in the previous year. Network power sales declined 10 percent to $1.50 billion from $1.67 billion in the year-ago quarter.
Climate technologies sales totaled $733 million, down 9 percent from last year's $810 million, and sales for appliance and tools edged up to $457 million from $446 million a year ago.
Emersons' operating profit margin slipped 220 basis points to 13.2 percent from a year ago, primarily due to deleverage on lower sales volume.
The company noted that the positive impact of the recovery from the Thailand flooding disruptions are now tempered by deterioration in the European economy and mixed global economic indicators.
Looking ahead to fiscal 2012, Emerson now expects earnings fin a range of $3.45 to $3.60 per share, on anticipated reported sales growth of 2 to 4 percent and underlying sales growth of 4 to 6 percent. Street is looking for full-year 2012 earnings of $3.51 per share on annual revenues of $25.28 billion. $3.27 per share.
Previously, the company was anticipating earnings per share growth of 8 to 12 percent, on projected reported sales growth of 4 to 6 percent and underlying sales growth of 5 to 7 percent.
'The good news is that most of these challenges are temporary, and our businesses and end markets remain fundamentally solid. We continue to believe 2012 will be a good year with record financial performance,' Farr added.
The company noted that it will provide further details regarding its outlook for 2012 and the next three years at its annual investor conference scheduled to be held on February 14 in New York City.
EMR closed Monday's regular trading session at $53.37, up $1.10 on a volume of 5.23 million shares, higher than the three-month average volume of 4.63 million shares. In the past 52-week period, the stock has been trading in a range of $39.50 to $62.24.
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