M&A

3 November, 2009

UPDATE 4-Emerson 4th-quarter profit beats estimates

* Q4 shr $0.67 vs $0.60 estimate

* Sees underlying 2010 sales down 5 pct to 7 pct

* Trailing 3-month orders down 15 pct to 20 pct in Sept

* Shares up 2 pct (Adds executive quotes, updates stock price)

NEW YORK, Nov 3 (Reuters) - Industrial conglomerate Emerson Electric Co (EMR.N) reported a higher-than-expected quarterly profit on Tuesday and said it is positioned for an economic recovery, sending its shares up 2 percent.

Earnings fell 27 percent to $506 million, or 67 cents a share, in the fiscal fourth quarter ended Sept. 30, from $688 million or 88 cents per share a year earlier.

Analysts, on average, had expected profit of 60 cents per share, according to Thomson Reuters I/B/E/S.

The company's shares closed up 2 percent at $38.97 on the New York Stock Exchange.

Emerson -- whose products range from power systems for large computer networks to wireless communications for industrial uses, as well as climate control technology -- said sales fell 21 percent to $5.3 billion, matching Wall Street forecasts. Sales in its key process management segment fell 13 percent from a year earlier, but the unit's profit margins rose over the third quarter.

"There's not that strong underlying demand out there yet," said Chief Executive David Farr during the conference call.

Amid the recession, the company has done significant restructuring, with over 20,000 people leaving the organization. But Farr said the company had not yet finished that process.

St. Louis-based Emerson said it expects flat to slightly lower profit margins in fiscal 2010, now under way, and said underlying sales would be down 5 percent to 7 percent. But it said sales would be down as much as 20 percent in the first quarter.

Order declines slowed in September, Emerson said in a regulatory filing, helped by the weaker U.S. dollar.

Three-month trailing orders were down 15 percent to 20 percent, marking an improvement from the August and July pace. Orders fell at a slower rate in four of Emerson's five divisions, but were down more than 30 percent in its industrial automation segment.

Demand from China was helping improve orders in the network power and climate businesses, Emerson said, while improvement in the process segment largely reflected foreign exchange.

The company also said it has $1.4 billion of acquisitions underway and that it would like to do another $500 million to $600 million in acquisitions in the rest of the fiscal year. (Reporting by Nick Zieminski and Helen Chernikoff; Editing by Gerald E. McCormick, Dave Zimmerman, Phil Berlowitz)

Source: http://www.reuters.com