Emerson Electric Company (EMR) reported its 2012 first quarter earnings today and it wasn’t very good news. Earnings were down 23%, hurt by floods in Thailand at the end of 2011.
The Ferguson, Missouri-based company had fiscal first quarter net income of $371 million, compared with $480 million in the same period in 2011.
Emerson Electric is still expecting a slow-down for the next couple of months, as supply chains in Thailand continue to get back to normal. After that, it expects the rest of 2012 to be on track.
As Chairman and CEO David Farr said about first quarter earnings, “Unfortunately, the headwinds were too strong and numerous to overcome. The good news is that most of these challenges are temporary, and our businesses and end markets remain fundamentally solid. We continue to believe 2012 will be a good year with record financial performance.”
The main worry for companies like Emerson, however, will be whether floods happen again in Thailand in 2012 and, if so, will the government have a plan in place to prevent the same situation as last year?
So far, there’s nothing positive on that front, which is leading many international companies to question their long-term future in Thailand if things do not improve.