Emerson Announces Third Quarter 2009 Results

Source

• Sales of $5.1B, flat with second quarter 2009
• Earnings per share of $0.51
• Free Cash Flow of $800M, Up 19% from third quarter 2008;
  Operating Cash Flow of $916M, Up 11%
• Expects full year earnings per share $2.20 to $2.30

ST. LOUIS, August 4, 2009 – Emerson (NYSE: EMR) announced net sales for the third quarter ended June 30, 2009 of $5.1 billion, a decrease of 22 percent compared with $6.6 billion for the same period last year.  Underlying sales in the quarter declined 19 percent, which excludes a 4 percent unfavorable impact from currency exchange rates and a 1 percent positive impact from acquisitions.  On a sequential basis, sales in the third quarter 2009 were essentially flat with the second quarter, an encouraging sign of stabilization, but below what we had expected a few months ago.

Fiscal Year 2009 Outlook
The bottom of the global economic recession is forming and we expect to see the bottom in the global GFI (gross fixed investment) decline in our fourth fiscal quarter, but we do not expect to see any significant recovery until late 2010.  This will be discussed during our conference call later today.  Based on results for the first three quarters of fiscal 2009 and current order trends, Emerson expects full year earnings per share in the range of $2.20-$2.30.  Underlying sales are expected to decline 12 to 13 percent from 2008 levels, which excludes an estimated 4 percent unfavorable impact from currency translation and a 1 percent favorable impact from completed acquisitions resulting in a net sales decline in the range of 15 to 16 percent to $20.8 to $21.1 billion.  Fiscal 2009 operating cash flow is targeted to be $3 billion and the free cash flow target is $2.4 to $2.6 billion.  We will continue to reduce our global inventory until the global recovery is clearly happening, early in calendar year 2010.  The company expects to incur approximately $280 to $300 million of restructuring expense in fiscal 2009.