Emerson Electric Co. (EMR), a diversified technology company, reported Tuesday a surge in the third- quarter profit on the absence of prior-year's charges. Net sales, however, were hurt by Artesyn divestiture impact.
Looking ahead, for fiscal 2014, the company said its results would trend to the low end of the given forecast range due to the slower-than-expected economic environment.
For the third quarter, net earnings attributable to common shareholders grew 277 percent to $728 million from last year's $194 million. Earnings per share were $1.03, significantly higher than last year's $0.27.
Earnings per share grew 6 percent excluding Artesyn related charges in the prior year despite a $0.03 headwind from difficult tax rate comparisons, the company noted.
On average, 22 analysts polled by Thomson Reuters expected earnings of $1.06 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter, meanwhile, edged down 1 percent to $6.312 billion from $6.344 billion last year. Analysts expected sales of $6.45 billion.
Network Power net sales declined 18 percent, reflecting the Artesyn divestiture impact of 20 percent.
Underlying sales grew 3 percent with improved results in North America, Europe and Asia, as business conditions continued to improve, albeit slowly and unevenly across markets and geographies.
Growth in mature markets was stronger than in emerging regions, reflecting global political instability and economic uncertainty in some developing countries.
For fiscal 2014, Emerson Electric said it now expects financial performance trending to the low end of previously communicated expectations of 3 to 5 percent underlying sales growth, minus 1 to plus 1 percent net sales change, and earnings per share of $3.68 to $3.80.
Analysts expect earnings of $3.75 per share for the year.
According to the firm, order trends are expected to improve modestly in the fourth quarter to between 5 and 7 percent underlying growth, led by better conditions in emerging markets and firming demand in the U.S.
Chairman and Chief Executive Officer David Farr said, "Robust orders growth in the spring has driven backlog to a record level, supported by large projects with long lead times, and strategic investment programs continue to progress well, providing a foundation for a more favorable growth environment next year."
Emerson further said the proceeds from the completion of the Connectivity Solutions business unit divestiture in the fourth quarter will augment share repurchase by about $100 million, increasing the full year to approximately $1 billion.
In pre-market activity, Emerson shares were losing 1.55 percent, and trading at $63.
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