2nd-quarter sales throw Emerson’s stock into a slide
Emerson Electric Co., the electrical products maker seeking to acquire Chloride Group Plc, fell the most in more than a year after second-quarter sales trailed estimates and data showed Chinese manufacturing was slowing.
Ferguson-based Emerson dropped $3.44, or 6.4 percent, to $50.18 in New York Stock Exchange composite trading, the biggest percentage decline since Feb. 17, 2009. The shares have gained 18 percent this year.
Revenue for the quarter was $5.14 billion, compared with an average estimate of $5.22 billion from 12 analysts surveyed by Bloomberg. Net income climbed 8.6 percent to $405 million, or 53 cents a share, from $373 million, or 49 cents, a year ago.
"Revenues came in light, which is different than most diversified industrials," Joel Levington, a managing director of corporate credit for Brookfield Investment Management Inc. in New York, said in an e-mail. Concern that Chinese manufacturing is slowing pulled some stocks lower, "and China has been an area of growth," he said.
Emerson last week made a $1.1 billion (723 million pound) offer to buy Chloride, Britain’s largest maker of backup power equipment, to expand its network power division.
Ferguson Chief Executive David Farr declined to discuss Emerson’s efforts to acquire Chloride, citing U.K takeover panel rules, on a conference call with analysts Tuesday.
"We are investing in the emerging markets, we are investing in new products, and we are positioning ourselves for what I would call a slow, steady recovery," he said.