May 7 (Bloomberg) -- Emerson Electric Co., a maker of air-conditioner compressors and equipment for power plants and data centers, cut its 2013 profit forecast after a sluggish worldwide economy curbed demand in the first quarter.
Earnings for the year will probably be $3.48 to $3.58 per share, the St. Louis-based company said today in a statement. That trails the $3.60 average of analysts’ estimates as well as Emerson’s previous projection of $3.53 to $3.63. Net income of 77 cents a share in the fiscal second quarter, which ended March 31, trailed the 78-cent average of analysts’ estimates.
“Economies around the world are struggling for momentum,” Chief Executive Officer David Farr said in the statement. “Demand slowed in the second half of the quarter as overall global business confidence deteriorated. We do not see a catalyst to economic growth over the next six to nine months.”
The global economy may remain weak for about five years as U.S. and European policy makers grapple with reducing debt, Farr predicted in September. The company saw 6 percent growth in emerging markets in the first quarter, in line with the CEO’s prediction that growth there would outpace that in developed countries.
Emerson fell 1.3 percent, the biggest drop in the Standard & Poor’s 500 Industrials Index, to $56.56 at 4:01 p.m. in New York. The shares have climbed 6.8 percent this year.
Net income rose 2.9 percent to $561 million from $545 million, or 74 cents a share, a year earlier, the company said. Revenue grew less than 1 percent to $5.96 billion, trailing analysts’ estimates of $6.03 billion.
“After a weaker than expected February and March, orders in April continued to trend downward, reflecting further deterioration in business confidence,” the company said today.
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