Emerson fiscal 2Q profit falls on weak sales

ST. LOUIS (AP) -- Emerson Electric Co. said Tuesday that its fiscal second-quarter profit fell a little more than 2 percent because of economic conditions in Europe and China.

The results fell short of Wall Street predictions and Emerson shares dropped nearly 5 percent in premarket trading.

For the quarter ended March 31, the St. Louis-based company earned $545 million, or 74 cents per share, compared with $556 million, or 73 cents per share, in the same quarter last year.

Revenue rose about a percent to $5.92 billion from $5.85 billion.

Analysts, on average, expected a profit of 80 cents per share on $6.02 billion in revenue, according to a FactSet poll.

Emerson said the restoration of the supply chain that was disrupted by the flooding in Thailand, along with strong demand from global oil and gas markets, boosted results at its process management business, where sales rose 13 percent to $1.87 billion.

But soft economic conditions in Europe and China, along with continued weak demand from heating and cooling, telecommunications, and information technology markets resulted in overall slow growth, the company said.

Emerson said that while it's likely that those segments will recover, it will probably happen at a slower pace than previously expected. In addition, while sales and orders have improved in China, European demand is still weak.

Emerson, based in St. Louis, expects to post a 2012 profit of $3.35 to $3.50 per share on sales growth of 2 to 4 percent. Based on the company's fiscal 2011 sales of $24.22 billion, the guidance projects $24.7 billion to $25.19 billion in sales for fiscal 2012.

Analysts polled by FactSet expect a profit of $3.50 per share on $25.05 billion in revenue.

Emerson shares fell $2.55, or 4.9 percent, to $49.99 in premarket trading.