(Reuters) - Emerson Electric Co (EMR.N) reported a sharp drop in quarterly profit on Tuesday, hurt by an impairment charge for its embedded computing and power business, and said it was selling a majority stake in the unit for about $300 million.
The diversified U.S. manufacturer said it would sell 51 percent of the business, which supplies technology used in communications and computing equipment, to private equity firm Platinum Equity and retain a noncontrolling interest.
“Continued weakness in the technology equipment and mobile device markets that this business serves has resulted in lower sales and earnings growth expectations,” Emerson said in a statement.
The St. Louis-based company will take a $503 million pretax goodwill impairment charge related to the business.
Net income fell to $194 million, or 27 cents per share, in the third quarter ended June 30 from $770 million, or $1.04 per share, a year earlier.
Excluding the impairment charge as well as one for repatriating cash from the embedded computing unit, Emerson reported earnings of 97 cents per share. That was a penny below the analysts’ average estimate, according to Thomson Reuters I/B/E/S.
Revenue fell 2.2 percent to $6.34 billion, about $100 million below Wall Street’s target.
Reporting by Lewis Krauskopf; Editing by Lisa Von Ahn