Here's One Fortune 500 CEO Who Does NOT See A Sustainable Rebound

Emerson CEO

Shares of the diversified engineering technology company Emerson (EMR) are being punished today after missing analyst Q2 (Calendar Q1) earnings estimates by a penny.

While the company reported improving trends for most of its business segments, the underlying sales declines in some segments were ugly. Note that Emerson represents a sort of high-tech widgets business, that feeds into many parts of the economy.

The company’s Process Management business, which involves intermediate measurement and valve technology used by many types of companies, saw underlying sales drop by 13%. Industrial Automation experienced a 16% drop in underlying sales while Network Power saw a 6% drop. Better performing segments were Climate Technologies and Appliance and Tools which experienced 19% and 2% underlying sales growth respectively.

Most notable though, was the economic view of Emerson’s President & CEO David Farr, which had a starkly more negative tone than many of his peers this earnings season.

He said, “While the pace and strength of the global recovery continue to gain momentum, we remain concerned about the sustainability of the U.S. and European economies compared to historical recovery cycles. However, we are confident that our aggressive actions to strengthen performance and accelerate growth are achieving what we expected and we feel confident in Emerson’s improved outlook.”

Keep in mind this is the CEO who has worried in the past about America destroying its manufacturing industry.

Still, the company increased its full-year earnings per share outlook to $2.40 – $2.55 per share from $2.20 – $2.40 previously, based on flat to slightly positive expected underlying sales growth. Again though, net-net investors weren’t impressed. EMR shares are down 6.3% right now, which is far more than the overall market.

See Emerson’s full release here >

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