United States. Emerson reported results for the fiscal third quarter ended June 30, 2020 and announced updated guidance for the full year.
Third-quarter GAAP net sales were down 16 percent and core sales were down 15 percent, excluding the unfavorable 1 percent currency. Revenue declines were in line with management's expectations, as COVID-19 negatively impacted nearly all end markets and geographies during the quarter.
The company continued to see particular weakness in North American markets, while China grew 3 percent. Underlying orders for the past three months of the third quarter fell 19 percent, reflecting customers in the industrial, commercial and residential markets cutting costs and budgets in response to COVID-19-related operating restrictions and an overall drop in economic activity.
Commercial & Residential Solutions
Net sales of Commercial and Residential Solutions decreased 20 percent and underlying sales were down 19 percent, excluding the unfavorable currency of 1 percent. Underlying sales in the Americas were down 20 percent, reflecting a broad-based decline, particularly in commercial end markets. Europe fell 12 percent as weak air conditioning more than offset demand in heat pump markets. Finally, Asia, the Middle East and Africa fell by 18 percent and China by 9 percent.
Order rates varied dramatically during the quarter, from down 35 percent in April year-over-year to a positive 1 percent in June. Underlying orders for the last three months of June fell 19 percent as OEM and distribution-based businesses experienced significant declines in business activity. Companies most exposed to large and DIY retail performed better, but remained negative in the quarter.
Automation Solutions
Automation Solutions' net sales declined 14 percent, and underlying sales were down 13 percent, excluding the unfavorable 1 percent currency. In the Americas, underlying sales were down 19 percent, while North America was down 20 percent, reflecting continued widespread industrial weakness.
Underlying sales in Europe fell 8 percent as Markets in Western and Eastern Europe showed early signs of stabilization. Core sales from Asia, the Middle East and Africa fell 6 percent, as solid growth in China of 9 percent was more than offset by weakness in the rest of Asia and the Middle East. The longer cycle final control and systems businesses experienced high-digit and single-digit declines, respectively, while the shorter cycle instrumentation business had a steeper drop.
