10-KPeriod: FY2007

EMERSON ELECTRIC CO Annual Report, Year Ended Sep 30, 2007

Filed November 19, 2007For Securities:EMR

Summary

Emerson Electric Co.'s 2007 10-K filing highlights a diversified global technology company with strong performance across its five key segments: Process Management, Industrial Automation, Network Power, Climate Technologies, and Appliance and Tools. The company reported robust net sales growth and increasing earnings from continuing operations, indicating effective operational strategies and market presence. Emerson's commitment to innovation is evident through its continued investment in research and development. The company's global reach is substantial, with a significant portion of its sales generated internationally, diversifying its revenue streams. While global operations introduce inherent risks such as currency fluctuations and political instability, Emerson's diversified business model and robust risk management practices appear to mitigate these effects. The backlog of orders also shows a healthy increase, suggesting sustained demand for its products and services heading into the next fiscal year. The company also actively engages in share repurchases, returning value to shareholders.

Financial Highlights

23 data points
Beta

Revenue

$22.13B

36.4% Gross Margin

Net Income

$2.14B

9.7% Net Margin

EPS (Diluted)

$2.66

Cash & Equivalents

$1.01B

Free Cash Flow

$3.02B

Financial Statements
Beta
Revenue$22.13B
Cost of Revenue$14.07B
Gross Profit$8.06B
SG&A Expenses$4.57B
Operating Income$2.13B
Net Income$2.14B
EPS (Basic)$2.69
EPS (Diluted)$2.66

Key Highlights

  • 1Significant year-over-year growth in net sales and earnings from continuing operations, demonstrating strong financial performance.
  • 2Diversified business model with five distinct segments: Process Management, Industrial Automation, Network Power, Climate Technologies, and Appliance and Tools, contributing to revenue stability.
  • 3Increased consolidated order backlog to $4.9 billion, indicating strong future demand and revenue visibility.
  • 4Commitment to innovation demonstrated by a consistent increase in research and development spending over the past three fiscal years.
  • 5Substantial international sales (over 50% of total sales), showcasing global market penetration and diversification.
  • 6Active share repurchase program, with over 4.7 million shares repurchased in the fourth quarter of fiscal 2007, returning capital to shareholders.

Frequently Asked Questions

Emerson Electric operates through five main segments: Process Management, Industrial Automation, Network Power, Climate Technologies, and Appliance and Tools. These segments provide a wide range of products and services for industrial, commercial, and consumer markets globally.

Leading up to fiscal year 2007, Emerson Electric demonstrated consistent growth. Net sales increased steadily, reaching $22.572 billion in 2007. Earnings from continuing operations also showed a strong upward trend, reaching $2.136 billion in 2007, with diluted earnings per share at $2.66. This indicates a healthy expansion of the business and improving profitability.

Emerson's strategy involves delivering solutions through high-quality products at competitive global costs, supported by ongoing research and development. The company also pursues growth through strategic acquisitions and maintains a leadership position in many of its product lines. Its diversified global presence and focus on innovation are key to its competitive strategy.

Key risks include intense competitive pressures affecting pricing and demand, the need for continuous R&D and successful new product introductions, challenges in integrating acquired businesses, reliance on capital markets for funding, potential shortages or price increases in raw materials, operational disruptions at global production facilities, adverse foreign currency fluctuations, and downturns in the end markets it serves.