Emerson (NYSE: EMR), St. Louis, MO, reported sales for the second quarter of $6 billion, an increase of 1 percent from the same period a year earlier. Sales reflected mixed results across end markets and geographies, but slow economic growth overall as business investment stalled, particularly in mature markets.
Process Management sales grew 8 percent, as global oil and gas, chemical, and power industry investment remained solid. Underlying sales increased 9 percent with currency translation deducting 1 percent, led by 10 percent growth in the systems and solutions business. Sales in the U.S. decreased 1 percent, as higher natural gas inventories contributed to slower investment.
Industrial Automation reported and underlying sales decreased 6 percent, with the U.S. down 1 percent. Demand for industrial goods is expected to remain challenging in the second half of 2013, particularly in Europe.
Network Power reported and underlying sales declined 4 percent, with U.S. underlying sales down 2 percent. The embedded computing and power business declined at a double-digit rate, reflecting weak and volatile demand for technology equipment and mobile devices, and continued product line rationalization. Near term end market demand is expected to reflect the uncertainty and caution in the broader macroeconomic environment.
Climate Technologies reported and underlying sales grew 7 percent, as residential air conditioning markets reflected strong demand and comparisons eased. U.S. underlying sales increased 8 percent. Commercial air conditioning and refrigeration demand remained soft, with the transportation business particularly weak.
Commercial & Residential Solutions sales declined 4 percent, reflecting a 6 percent deduction from the Knaack business divestiture. Underlying sales grew 2 percent, benefiting from a 5 percent increase in the U.S., which was led by the residential storage business. Modest growth is expected to continue in North America residential end markets in the near term.
For the first six months, sales for Emerson were $11.2 billion, up 3 percent year-over-year. Profit increased 11 percent to $937 million.
“Economies around the world are struggling for momentum,” said chairman and CEO David N. 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. In light of the current business environment, I was pleased with our underlying growth, especially in emerging markets, which grew 6 percent. We will continue to target investment in growing regions, while remaining cautious in mature markets until the economy accelerates.”
