ST. LOUIS — Industrial conglomerate Emerson Electric Co. reported estimate-beating quarterly earnings on Wednesday, helped by strong demand for its automation systems amid a tight labor market and its air-conditioning and refrigeration products.
Companies across North America have been rushing to add robots to their assembly lines to keep up with strong demand at a time when many of them have struggled to lure back workers displaced by the pandemic.
That led to first-quarter sales at Emerson’s Automation Solutions unit, its biggest business, jumping 4.2% to $2.81 billion. It caters to sectors from utility and mining to chemicals and automotive.
“Our businesses delivered excellent financial results in the face of some significant operational challenges,” Chief Financial Officer Frank Dellaquila said during an earnings call with investors Wednesday morning.
Chief Operating Officer Ram Krishnan said during the call that the company is seeing some signs of stabilization in availability of electronic components, but expects supply chain issues to continue for the rest of the year. As a result, Emerson is ramping up secondary suppliers and redesigning some products to use available components.
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Labor turnover has been high, but manageable, Krishnan said. But in November and December, as omicron surged, some plants in the Midwest saw absenteeism rates as high as 20%.
With economies reopening on easing restrictions and U.S. homebuilding activity hitting a nine-month high in December, Emerson’s commercial and residential market division saw sales rising 13% to $1.67 billion.
Ferguson-based Emerson, which began life as a seller of fans and electric motors a century ago, has been pivoting more towards technology solutions to capitalize on an evolving industrial software market.
Excluding items, Emerson earned $1.05 per share, above Wall Street expectations of 99 cents per share.
The company’s net income rose to $896 million, or $1.50 per share, in the quarter ended Dec. 31, from $445 million, or 74 cents per share, a year earlier.
Net revenue rose 8% to $4.5 billion in Emerson’s first quarter.
Annika Merrilees of the Post-Dispatch contributed to this report.