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Emerson Electric (EMR) Three-Month Orders Growth Down 15% to 20% in May

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June 22, 2015 7:03 AM EDT

Emerson Electric (NYSE: EMR) disclosed the following on Monday:

The following information is furnished pursuant to Regulation FD.
Emerson 3-Month Orders Growth
(Percentage change versus prior year; trailing 3-month averages, excluding acquisitions and divestitures, including currency translation)
March '15
April '15
May '15
Process Management
-20 to -15
-20 to -15
-20 to -15
Industrial Automation
-15 to -10
-20 to -15
-20 to -15
Network Power
-20 to -15
-20 to -15
-20 to -15
Climate Technologies
-10 to -5
-10 to -5
-10 to -5
Commercial & Residential Solutions
-5 to 0
-5 to 0
-5 to 0
Total Emerson
-15 to -10
-15
-20 to -15
May 2015 Orders Comments
Trailing three-month orders decreased as monthly orders continue to reflect the drop in oil prices, a global slowdown in capital spending, and significant strength in the U.S. dollar, which deducted 6 percentage points through currency translation. Global spending remains sluggish as oil prices continue to affect capital spending in both oil and gas and energy-related markets. Underlying orders were down 10 percent reflecting slow market conditions in all segments. Based upon these trends, the Company now expects third quarter underlying sales to be moderately negative compared to the prior year, excluding unfavorable currency of approximately 5 percent and an impact from divestitures of approximately 2 percent. Reported sales for the third quarter are now expected to decrease approximately 11 percent.
Process Management order trends continued to reflect the impact of lower oil prices, as well as unfavorable currency translation, which deducted 6 percentage points, including backlog revaluation. Underlying orders decreased in all regions.
Industrial Automation orders were down, reflecting continued weakness in industrial spending, upstream oil and gas, and Europe. Underlying orders were also down reflecting decreases in most businesses. Currency translation deducted 9 percentage points.
Network Power orders decreased as underlying global demand for data center infrastructure and telecommunications investment remained weak. Currency translation deducted 6 percentage points.
Climate Technologies orders were down as U.S. HVAC customers work through the remainder of pre-built inventory driven by regulatory changes for residential air conditioning effective January 1, 2015. Underlying orders were down moderately, with modest growth in Asia more than offset by decreases in North America and Europe. Currency translation deducted 3 percentage points. U.S. air conditioning orders have been negatively impacted by cooler than normal temperatures and significant rainfall during the early summer months in key parts of the U.S., and continued abnormal weather would present additional risk to this business for the remainder of the year.
Commercial & Residential Solutions orders decreased modestly. Growth in wet/dry vacuums and food waste disposers was more than offset by decreases in the storage and professional tools businesses. Currency translation deducted 2 percentage points.

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