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Emerson's 2Q Climate Technologies Sales Up 5%
May 15, 2014
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Overall Emerson sales were down 2% in the second quarter of its fiscal year. Sales were affected by divestitures and acquisitions, with underlying sales up 2% in the quarter.

Emerson's Commercial & Residential Solutions business segment produces InSinkErator brand food waste disposers, instant hot water dispensers, and pulper systems for foodservice establishments. The segment also makes Ridgid brand outdoor power equipment, power tools, and wet/dry vacs. Other products include residential/commercial storage products.

Commercial & Residential Solutions sales grew 1% in the quarter. Harsh winter weather contributed to a 1% decline in the United States, but this was more than offset by 8% growth in international markets. Strong growth in the professional tools, wet/dry vacuums, and food waste disposers offset declines in the storage businesses. Segment margin of 21.4% improved slightly from the prior year quarter.

Emerson said residential and commercial construction in the U.S. started the year slow, but the company expects this to improve in the second half of the fiscal year. Emerson expects this to support stronger growth in the second half.

Emerson's Climate Technologies segment makes residential and commercial air-conditioning and refrigeration products, including programmable thermostats, compressors, and refrigeration controls.

Climate Technologies' net sales were up 5% in the second quarter of the fiscal year, led by strength in global refrigeration markets. Underlying sales were up almost 6%. U.S. sales were up 2%, Asia was up 11%, and Europe was up 3%. The U.S. air-conditioning business increased moderately, with mid-single-digit growth in residential markets and low-single-digit growth in commercial business. Demand was strong in China, driving Asian growth, led by the refrigeration, solutions, and temperature sensors businesses. Market conditions were still improving in Europe. Segment margin improved 20 basis points to 17.9%.

Emerson expects refrigeration markets are expected to remain strong, along with improving market conditions in the U.S.

Emerson overall saw sales in the United States increase 3%. Sales in Asia increased 4%, including China, where sales were up 9%. Sales in Europe were up 1%. Sales in the Middle East/Africa were down 9%--this on the heels of robust growth in the previous year.

Other business segments include Process Management, Industrial Automation, and Network Power.

Emerson saw robust orders growth in the second quarter and saw this as the result of an improving global macroeconomic environment. The company expects underlying sales growth of 3-5% and net sales of -1% to 1% in the full 2014 fiscal year.

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