Emerson Electric Co. (NYSE:EMR) reported its third quarter financial results of 2016 on Tuesday, announcing the sales of two units for $5.2 billion in total.
According to the statement, revenue decreased 6.9% to $5.13 billion in the third quarter ended June 30, 2016, missing the analyst’s expectation of $5.32 billion in sales. Net sales in process management, industrial automation, and commercial & residential solutions fell 13%, 11%, and 16%, respectively.
Emerson Electric’s profits fell from $564 million, or 84 cents per share the same period last year to $479 million, or 74 cents per share this year. Adjusted earnings per share was 80 cents, below estimates of 84 cents earnings per share.
The company also announced in the statement that it reached an agreement to sell two assets to focus on company’s high-growth businesses. Emerson Electric’s network power unit will be sold to Platinum Equity, an investment firm, for $4 billion, and its motors and electric power unit will be sold to Japan's Nidec Corp in $1.2 billion deal.
“These agreements represent a significant step forward in the overall portfolio repositioning strategy we announced last year in June. Management and the Board will continue to focus on where best to allocate the proceeds to bolster our presence within our core Automation Solutions and Commercial & Residential Solutions business platforms in order to drive growth, profitability and shareholder value,” said David N.Farr, the Chairman and CEO of Emerson Electric.
Based on the third quarter financial results, the company expected its sales to decrease 9% to 10% for the fiscal year 2016. Earnings per share were expected to be between
$2.37 to $2.55 per share, and adjusted earnings per share to be $2.90 to $3.00.
Farr also said in May that Emerson would pursue to increase sales to $20 billion per share from previous $16 billion after the sales of two units. In the statement released on Tuesday, Farr said that the proceeds of the sales would support company’s commercial and residential division, as well as its automation units.
Shares of Emerson closed at $53.03 per share, falling 4.93% on Tuesday.