Emerson announced that net sales for the first quarter ended December 31, 2008 were $5.4 billion, a decline of 2% from $5.5 billion reported in the same period last year. This includes underlying sales (which exclude acquisitions, divestitures and foreign currency translation) that were essentially flat, a 4% unfavorable impact from foreign currency translation, and growth from acquisitions of 2%. Underlying sales in the United States declined 7% and underlying international sales increased 7%, including 10% growth in emerging markets.
Earnings and earnings per share from continuing operations for the first quarter were $458 million and $0.60 respectively, versus $519 million and $0.65 in the same period last year. This represents an 8% decline in earnings per share from continuing operations. Higher restructuring in the current year and lower gains compared to last year negatively impacted earnings per share comparisons by $0.08. Including the impact of discontinued operations in the first quarter of fiscal year 2008, net earnings per share for the first quarter declined 15%.
"Emerson has performed extremely well considering the severe market conditions that we have faced in recent months," said Chairman, CEO and President David N. Farr. "Our financial position remains strong, and we are taking advantage of this economic downturn to improve our competitive position. In troubled times, customers turn to industry leaders like Emerson for stability and reliable performance."
The operating profit margin declined 20 basis points in the quarter to 14.8%. Cost reduction initiatives and restructuring benefits mitigated deterioration of the operating profit margin in a challenging environment of increased commodity inflation and volume deleverage. As anticipated, the pretax earnings margin for the first quarter was 12.3% compared to 14.0% in the prior year period due to restructuring of $43 million versus $9 million in the prior year. In addition, the first quarter of 2008 included $64 million in gains related to the sale of an equity investment and facility versus $4 million in 2009.
"Emerson will continue to drive innovation across the company," Farr said. "While economic conditions may cause us to be more selective about where we invest, we will continue to invest for future growth and long-term value creation."
Network Power achieved sales growth of 2% in the quarter. Underlying sales were flat with a positive 6% impact resulting from the Embedded Computing acquisition and a 4% negative impact from currency translation. Strength in the China power systems and inbound power businesses was offset by weakness in the uninterruptible power supply, precision cooling and embedded power businesses. The margin for this segment was 10.4% versus 12.8% in the prior year quarter driven primarily by dilution from acquisitions and the $17 million increase in restructuring costs.
