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Emerson Electric (EMR) posted disappointing fiscal second-quarter results Tuesday. Though we expect to take a closer look at our valuation model, we don't expect to make a material change to our fair value estimate at this time.

The firm's revenue and earnings per share increased slightly on a year-over-year basis. The firm blamed weakness in Europe and China as well as deteriorating demand in the HVAC, telecommunications and IT markets. Interestingly, the weakness in HVAC runs counter to what we've heard from United Tech (UTX) in its quarterly report. The firm's operating margin dropped 40 basis points from last year's quarter, though it did advance on a sequential basis. Earnings per share came in at $0.74 per share, which fell below consensus expectations of $0.80 per share.

Looking ahead, Emerson noted that its expectations for expansion in Europe and China are now lower than those of just 90 days ago when it issued original guidance for fiscal 2012. Still, the firm reiterated its view that it expects to general record sales, profitability and earnings in 2012. Specifically, the company expects order growth of 3% to 5%, its operating margin to come in the range of 17.5% to 17.8%, and earnings per share to come in the range of $3.35 to $3.50 (was $3.45 to $3.60).

Emerson's stock is currently trading within our fair value range, but we're huge fans of its dividend profile and view its cash-flow generation as solid. The company is expected to pull in more than $2.7 billion in free cash flow in 2012. We continue to like our position in the portfolio of our Dividend Growth Newsletter.

Source: Emerson Electric's Dividend Still Strong Despite Hiccup In 2Q

Additional disclosure: EMR is included in our Dividend Growth portfolio.