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Emerson Lifts Profit Outlook

TSC Staff

Emerson Electric's (EMR Quote) third quarter had double-digit sales growth from last year, and the maker of motors and power systems raised its earnings forecast for the fiscal year.

Net income for the quarter ended June 30 totaled $358 million, or 86 cents a share, including a tax charge of $58 million, or 14 cents a share, for repatriating about $1.3 billion of foreign earnings. Before the charge, the St. Louis-based company would have earned $416 million, or $1 a share, 5 cents ahead of estimates.

A year ago, Emerson earned $341 million, or 81 cents a share. Sales for the quarter rose 11% to $4.5 billion, and were up in all segments except climate technologies.

The quarterly performance was led by the company's process management segment, which had sales of $1.1 billion, or 15% above the third quarter of fiscal 2004, as a result of increased demand in the power, oil and gas markets.

Emerson said it has seen continued order strength through June. Based on its orders and the results from the first three quarters of the year, the company now expects fiscal year earnings of $3.45 to $3.50. Including the tax effect of the repatriation, earnings should be $3.31 to $3.36.

On average, analysts surveyed by Thomson First Call are projecting a profit of $3.45 a share for the full year. Shares of Emerson were gaining $2.71, or 4%, to $68.51.