NEW YORK (Reuters) - A slowing U.S. economy will translate into slower order growth next year at Emerson Electric Co. (EMR.N: Quote, Profile, Research, Stock Buzz), the diversified manufacturer's chief executive, David Farr, said on Wednesday.
But the company expects strong second-half earnings this year, despite tough comparisons to last year, and predicts sales in the current quarter will top $5 billion, Farr said.
"We're going to do our first $5 billion quarter this quarter," Farr said.
Emerson, which each month reports order trends for its five main businesses, has reported higher orders for 41 consecutive months, with double-digit order growth over the past eight months.
"Soon it will probably be nine," Farr said at the Reuters Manufacturing and Transportation Summit in New York.
But underlying growth rates, which exclude impact from foreign currency movements, will slow by the end of 2006, he predicted.
"I would say you're going to see things stepping down a little bit," Farr said. "You're going to see us move down into that 8-9 percent range; next step will be in the 5-6 percent range."
Farr cited a slowdown in consumer spending and rising interest rates.
"By the end of this calendar year, we'll be going high-single digits underlying growth rates based on what I see economically happening," Farr told the Summit. Continued...
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