Automation vendors Emerson Electric and Mitsubishi Electric Corp. may excel in different industry segments, but their latest quarterly results have a similar ring. Both companies today reported year-over-year revenue declines, citing a dismal business climate.
For its first fiscal quarter, ended Dec. 31, 2009, process automation provider Emerson reported net earnings of $437 million on net sales of $5.0 billion, both down 7% from last year’s Q1.
Four out of Emerson’s five businesses saw sales decline in the quarter, with the Process Management and Industrial Automation groups experiencing the sharpest year-over-year slumps. Process reported $1.3 billion in sales, a 9% drop, and Industrial Automation slipped 21% to $876 million. Climate Technologies was the sole bright spot, with sales up 13% to $784 million.
Chairman, CEO, and President David Farr didn’t offer much color on the current conditions during a conference call with analysts today, saving much of his explanation until Emerson’s annual investor conference in New York on Friday. But he did say that he feels the market has reached bottom and that the company’s business segments will grow over the next several months on a rise in facility and inventory restructuring, as well as acquisitions the company has made in the past several months.
In October, for example, Emerson completed the acquisition of SSB Wind Systems, a global supplier of electrical pitch control systems for the wind turbine market, now part of Emerson’s Industrial Automation group. The acquisition strengthened Emerson’s presence in this fast-growing market, which includes technology such as alternators, converters, and couplings, the company said. Similarly, Emerson completed its purchase of Avocent Corp., a maker of IT infrastructure management solutions, on Dec. 11, 2009, and is integrating the company into its Network Power business, which saw a segment decline of 5% in the first quarter.
Looking ahead, Emerson expects full-year earnings per share in the range of $2.20 to $2.40, which includes the impact of the Avocent acquisition. This estimate is based on an anticipated underlying sales decline in the range of 3% to 6%.
Meanwhile, Japanese industrial giant Mitsubishi Electric Corp. also felt the effects of sluggish capital expenditures across its business segments and geographies, but was able to steer through the slump with less damage. Net sales in the fiscal third quarter fell only 3% to ¥781.1 billion. Operating income of ¥38.6 billion represented a 10% year-over-year decrease.
The Industrial Automation Systems group, which sells a variety of factory automation equipment, including PLCs, motion controllers, safety systems, and HMI interfaces, had total sales of ¥199.1 billion in the quarter, down just 1% from ¥200.2 million in the year-earlier quarter.