Emerson (NYSE: EMR), St. Louis, MO, reported sales for the first quarter ended Dec. 31, 2011, were $5.3 billion, down 4 percent in a year-over-year comparison. Underlying sales also declined 4 percent, with the U.S. down 4 percent and total international sales down 3 percent.
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Supply chain disruptions because of the flooding in Thailand affected results significantly in Process Management and to a lesser extent in Network Power, in total delaying approximately $300 million in sales, most of which are expected to be recovered in 2012.
Profit fell 23 percent to $371 million.
\”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,\” CEO David Farr said. \”Unfortunately, the headwinds were too strong and numerous to overcome. The good news is that most of these challenges are temporary, and our businesses and end markets remain fundamentally solid.\”
Process Management total and underlying sales decreased 1 percent, with the U.S. flat, Asia down 8 percent, and Europe up 6 percent, while orders in the quarter increased 15 percent.
Industrial Automation sales increased 2 percent during the quarter, reflecting stable capital goods demand across most end markets and favorable pricing. Underlying sales also grew 2 percent, with Europe up 5 percent, and Asia up 2 percent. Sales were flat in the U.S., with weakness in the hermetic motors business driven by a sharp decline in compressor demand.
Network Power sales declined 10 percent, with the most significant weakness in telecommunications and information technology end markets. Underlying sales also decreased 10 percent, with the U.S. down 17 percent, Asia down 6 percent, and Europe down 10 percent.
Climate Technologies sales declined 9 percent during the quarter, with broad weakness across the segment. Underlying sales also decreased 9 percent, with the U.S. down 5 percent, Europe down 11 percent, and Asia down 21 percent.
Tools and Storage sales grew 2 percent in the quarter, as demand in the non-residential construction-related businesses was strong. Underlying sales increased 5 percent and the divestiture of the heating products business deducted 3 percent.