Emerson Elec 2Q Earnings Fall 32% On Drop In Demand

   DOW JONES NEWSWIRES 
 

Emerson Electric Co.'s (EMR) fiscal second-quarter earnings fell 32% on slumping sales for the maker of industrial-automation equipment, power systems and heating and cooling gear.

The broad-based manufacturer has repeatedly warned of eroding business as demand weakened and customers reduced inventory recently amid the economic downturn. However, Emerson has said it won't deviate from its plans to acquire complementary businesses and expects to spend about $1 billion on takeovers this year.

In the quarter ended March 31, Emerson posted a profit of $373 million, or 49 cents a share, down from $547 million, or 69 cents a share from a year earlier. The company said higher restructuring expenses hurt the most recent results by 4 cents a share. The previous year's results included a 6-cent loss from discontinued operations.

Revenue decreased 16% to $5.09 billion, nearly one-third of which was due to the stronger dollar.

A survey of analysts by Thomson Reuters expected earnings per share of 53 cents on $5.09 billion in revenue.

Gross margin fell to 36.1% from 37.2%.

The company's network-power segment, one of Emerson's biggest businesses, saw sales fall 16% and earnings slump 44% amid weakness in the U.S. and Europe.

Shares of Emerson, which affirmed its 2009 forecast, closed at $37.35 Monday and weren't active premarket. The stock has rebounded from a 5-year low in March.

-By Joan E. Solsman and Kerry E. Grace, Dow Jones Newswires; 201-938-5089; [e-mail]