Emerson 2Q falls short; cites global conditions

Emerson posts higher 2nd-quarter net income but lowers 2013 outlook citing sluggish economy

Associated Press

ST. LOUIS (AP) -- Emerson Electric, citing a "deterioration in business confidence" from customers, fell short of Wall Street expectations during its second quarter and shares slipped Tuesday as the company trimmed its outlook for the year.

While net income and revenue climbed, Emerson said that orders from customers trailed off in final two months of the quarter, and that that trend continues.

The St. Louis company earned $561 million, or 77 cents per share. That's up from $545 million, or 74 cents per share, in the same period a year earlier, but a penny shy of analyst estimates, according to a poll by FactSet.

Revenue grew 1 percent to $5.96 billion. Wall Street was looking for revenue of $6.65 billion.

Emerson is a global company with operations in climate technology, network power and industrial automation.

After a weaker-than-expected February and March, orders in April continued to trend downward, according to the company.

"Economies around the world are struggling for momentum," said Chairman and CEO David Farr. "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."

Emerson said it now expects earnings of $3.48 to $3.58 per share for 2013 and revenue to grow by 1.5 percent to 2.5 percent. In February, it had forecast earnings of $3.53 and $3.63 per share and revenue to growth of 2 percent, to 5 percent.

Analysts are expecting revenue of $25.17 billion, an increase of 3 percent from $24.4 billion in fiscal 2012.

Shares of Emerson Electric Co. fell 93 cents to $56.37 in afternoon trading.

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