Emerson (NYSE: EMR) today announced that net sales for the third quarter ended June 30, 2013 decreased 2 percent from the prior year to $6.3 billion, reflecting a sluggish economic environment and difficult comparisons, as recovery from the Thailand flooding drove robust third quarter sales in the prior year. Underlying sales declined 1 percent, as divestitures deducted 1 percent and currency translation had a negligible impact, with the U.S. down 3 percent, Asia down 3 percent, and Europe down 6 percent. Emerging market growth of 2 percent was more than offset by weaker demand in mature economies.
"As expected, demand was slow in the quarter as economies around the world struggled for growth," said Chairman and Chief Executive Officer David N. Farr. "Low levels of business investment continue to reflect a cautious climate, particularly in mature markets. Despite some soft pockets, emerging markets were encouraging, as strategic investments generated growth. The near-term is expected to remain slow, but orders growth has resumed, suggesting the economic environment is beginning to stabilize and improve."
In a separate news release today, Emerson announced an agreement to sell a 51 percent stake in the embedded computing and power business to Platinum Equity. Continued weakness in the technology equipment and mobile device markets that this business serves has resulted in lower sales and earnings growth expectations, requiring a noncash pretax goodwill impairment charge of $503 million ($475 million after-tax, $0.65 per share). Additionally, anticipated repatriation of cash from this business resulted in an income tax charge of $33 million ($0.05 per share). Third quarter earnings per share including and excluding these charges were $0.27 and $0.97, respectively. Cash received from the transaction and repatriation will be used for $600 million in additional share repurchase, which is incremental to the current $800 to $900 million of annual share repurchase run rate.