Emerson (NYSE: EMR), St. Louis, MO, reported sales for the first quarter ended Dec. 31, 2012, were $5.6 billion, up 5 percent over the prior year. Underlying sales grew 6 percent, as currency translation and divestitures together deducted 1 percent, with the U.S. up 6 percent, Asia up 6 percent, and Europe down 2 percent.
Profit grew 22 percent to $454 million.
“Results for the quarter reflected solid performance amid what remains a challenging and uncertain global economy,” CEO David N. Farr said. “The pockets of growth our businesses captured were encouraging even though the level of total investment in our end markets continues to be slow. Recent order trends suggest market conditions have stabilized and may be poised for improvement, particularly in the emerging markets.”
Process Management sales increased 24 percent, as robust growth resulted from global energy investment and favorable comparisons from the supply chain disruption in the prior year. Underlying sales increased 24 percent, with the U.S. up 26 percent, Asia up 25 percent, and Europe up 11 percent.
Industrial Automation sales declined 7 percent during the quarter, as industrial investment in capital goods remained weak. Underlying sales decreased 6 percent, as currency translation deducted 1 percent, with the U.S. down 7 percent, Asia down 7 percent, and Europe down 9 percent. The electrical drives and power generating alternators and industrial motors businesses reflected the most pronounced weakness, which was partially offset by strength in the hermetic motors business driven by HVAC compressor demand.
Network Power sales decreased 2 percent, as telecommunications and information technology end market weakness persisted. Underlying sales also declined 2 percent, with the U.S. flat, Asia down 3 percent, and Europe down 8 percent. End market demand was mixed within the network power systems business, with strength led by the uninterruptible power supply business in North America, and weakness most severe in Europe. Sales were unchanged in the embedded computing and power business.
Climate Technologies sales grew 2 percent, reflecting growth for the first time in six quarters. Underlying sales increased 3 percent, as currency translation deducted 1 percent, with the U.S. up 1 percent, Asia up 7 percent, and Europe up 2 percent. Segment margin of 13.4 percent declined 20 basis points, as strong growth in Asia and improvement in the U.S. primarily came from lower-margin residential air conditioning end markets. Global refrigeration demand remained weak, particularly in the transportation business. Growth is expected to continue in the near term with an outlook for steady demand in residential end markets in Asia and the U.S., and potentially continued improvement in Europe.
Commercial & Residential Solutions sales declined 1 percent, reflecting a 5 percent deduction from the Knaack business divestiture. Underlying sales grew 4 percent, driven by a 7 percent increase in U.S. sales, which was supported by strong demand in residential end markets, in particular the food waste disposer business. Recovery in North America residential end markets is expected to continue in the near term.
