Emerson (NYSE: EMR) today announced that net sales for fiscal 2012 increased 1 percent from the prior year to $24.4 billion, led by two consecutive years of double-digit growth in Process Management. Underlying sales grew 3 percent, reflecting a substantial deceleration in global economic growth as the year progressed. Currency translation deducted 2 percent and acquisitions, net of divestitures, had a negligible impact. Underlying sales in the U.S. grew 2 percent, Asia grew 3 percent, and Europe declined 1 percent from the prior year.
Gross profit margin reached a record of 40.0 percent, up 50 basis points from the prior year, reflecting the benefits of technology innovation, portfolio management, and cost repositioning. Operating profit margin also reached an historic high of 17.7 percent
, as cost containment programs drove 20 basis points of expansion from 2011. The protracted slowdown in global telecommunications and information technology end markets has resulted in slower growth expectations for the embedded computing and power and DC power businesses, requiring a noncash goodwill impairment charge of $592 million. Net earnings per share of $2.67 includes this charge and compares to $3.27 in the prior year. Excluding impairments, normalized earnings per share was $3.39 versus $3.30 in the prior year.
“Emerson delivered another solid year of operational performance in 2012 despite a challenging global macroeconomic environment,” said Chairman and Chief Executive Officer David N. Farr. “The global economic climate is unusually weak for this stage in a normal recovery cycle. Our businesses remained focused on execution and managing through uncertain market conditions – hallmarks of Emerson’s culture. The record operating margin performance reflects our continuing efforts to drive innovation and operational excellence despite unique challenges, and provides a solid foundation as we move into 2013.”
Fourth Quarter Results
Net sales in the fourth quarter increased 2 percent from the prior year, reflecting unfavorable currency translation of 3 percent and a negligible impact from acquisitions, net of divestitures. Underlying sales grew 5 percent, as the U.S. increased 2 percent, Asia grew 8 percent, and Europe was flat. Process Management led the sales growth (reported up 18 percent, underlying up 21 percent), benefiting from strong energy-related end markets and continued conversion of backlog related to the Thailand flooding.