Adds chief operating officer comment in paragraph 4
May 7 (Reuters) - Emerson Electric EMR.N raised its full-year profit forecast on Wednesday on the back of strong demand for its automation services and products that also helped the company report second-quarter earnings ahead of Wall Street estimates.
The company's shares jumped more than 3% to $110.79, their highest in five weeks.
Emerson also warned of a $245 million hit in fiscal 2025 due to the trade war, but the company plans to offset the tariff impact by increasing prices, shifting its supply chain away from China and moving production to southeast Asia.
"These mitigation actions will completely offset the tariff headwinds in the fiscal year with carry-over benefit to completely cover the full annualised impact we will encounter in 2026," Chief Operating Officer Ram Krishnan said.
Companies cutting across sectors have been investing heavily to modernise their operations to lower costs and boost productivity, driving the demand for industrial automation services and products.
Rockwell Automation ROK.N, which reported better-than-expected quarterly earnings, has also benefited from the trend, sending its shares up 13%.
Emerson now expects annual adjusted earnings per share between $5.90 and $6.05, compared with its prior forecast range of $5.85 to $6.05. Analysts are expecting an annual profit of $5.91 per share, according to data compiled by LSEG.
The company also raised its forecast for full-year net sales to grow about 4% from its prior expectation of an increase of 1.5% to 3.5%.
"First-half performance and ability to navigate the tariff environment give us the confidence to update our 2025 outlook," Emerson CEO Lal Karsanbhai said.
On an adjusted basis, the company earned $1.48 per share in the second quarter, beating estimates of $1.41. Net sales of $4.43 billion also beat expectations of $4.38 billion.
(Reporting by Sameer Manekar in Bengaluru; Editing by Shounak Dasgupta)
((Sameer.Manekar@thomsonreuters.com))
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.