01—Abstract
Summary
Summary of the 10-K filed November 18, 2019. Cited figures are marked; the original filing is the authoritative source.
Emerson Electric Co. (EMR) reported total net sales of $18.4 billiona for the fiscal year ended September 29, 2019, representing a 6% increase over the prior year, driven significantly by acquisitions which contributed 5% to the growth.
Underlying sales, excluding the impact of acquisitions and foreign currency fluctuations, increased by 3%. Net earnings attributable to common stockholders rose by 5% to $2.3 billionb, translating to diluted earnings per share of $3.71, a 7% increase. The company generated robust operating cash flow of $3.0 billion.
Emerson operates through two primary segments: Automation Solutions and Commercial & Residential Solutions. The Automation Solutions segment, comprising over two-thirds of total sales, showed strong growth with a 7%c increase in sales, driven by acquisitions and underlying volume increases.
The Commercial & Residential Solutions segment saw a more modest 3%d sales increase, with mixed performance between its Climate Technologies and Tools & Home Products sub-segments, impacted by acquisition contributions and differing market conditions. The company continued its strategic portfolio management through acquisitions, particularly in the Automation Solutions segment, aiming to enhance its technology offerings and market position.
02—Key points
Key Highlights
- Emerson reported net sales of $18.4 billion in fiscal year 2019, up 6% from the prior year, with acquisitions contributing 5% growth.
- Net earnings attributable to common stockholders increased by 5% to $2.3 billion, and diluted EPS grew 7% to $3.71.
- Operating cash flow remained strong at $3.0 billion.
- The Automation Solutions segment showed robust growth, with sales up 7% to $12.2 billion, supported by acquisitions and underlying demand.
- Commercial & Residential Solutions segment sales grew 3% to $6.2 billion, with contributions from acquisitions offsetting some market softness.
- The company made strategic acquisitions primarily within the Automation Solutions segment, totaling $469 million in 2019.
- Emerson continues to return value to shareholders through dividends, with an announced 2% increase in the quarterly cash dividend.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2019, Emerson Electric Co kept $0.13.
- Revenue$18.37B100.0%
- Cost of revenue−$10.56B57.5%
- Gross profit$7.82B42.5%
- Operating costs−$5.51B30.0%
- Operating income$2.31B12.6%
- Interest, other & tax$-00.0%
- Net income$2.31B12.6%
Where FY2019 revenue went
$18.37B- Cost of revenue: $10.56B, 57% of revenue
- SG&A: $4.46B, 24% of revenue
- Net income: $2.31B, 13% of revenue
- R&D: $454.0M, 2.5% of revenue
- Other operating costs: $598.0M, 3.3% of revenue
Kept 13% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2019filed November 18, 2019Financial Statements
FY2019 against FY2018
| Line item | FY2019FY2018 | Change |
|---|---|---|
| Revenue | $18.37B$17.41B | +5.5% |
| Cost of Revenue | $10.56B$9.98B | +5.8% |
| Gross Profit | $7.82B$7.43B | +5.2% |
| R&D Expenses | $454.00M$436.00M | +4.1% |
| SG&A Expenses | $4.46B$4.27B | +4.4% |
| Operating Income | $2.31B$2.20B | +4.7% |
| Net Income | $2.31B$2.20B | +4.7% |
| EPS (Basic) | $3.74$3.48 | +7.5% |
| EPS (Diluted) | $3.71$3.46 | +7.2% |
| Shares Outstanding (Basic) | 616.20M632.00M | −2.5% |
| Shares Outstanding (Diluted) | 620.60M635.30M | −2.3% |
05—Questions
Frequently Asked Questions
How did Emerson's revenue perform in fiscal year 2019?
Emerson Electric Co. reported net sales of $18.4 billion for the fiscal year ended September 29, 2019, an increase of 6% compared to the prior year. This growth was driven by acquisitions (contributing 5%) and a 3% increase in underlying sales, partially offset by a 2% unfavorable impact from foreign currency translation.
What was the net earnings and EPS performance?
Net earnings attributable to common stockholders increased by 5% to $2.3 billion in fiscal year 2019. Diluted earnings per share (EPS) grew by 7% to $3.71, up from $3.46 in the prior year, attributed to modest sales growth and lower corporate expenses.
How did the company's business segments perform?
Emerson operates two main segments: Automation Solutions and Commercial & Residential Solutions. The Automation Solutions segment reported a 7% sales increase to $12.2 billion, driven by acquisitions and underlying demand. The Commercial & Residential Solutions segment saw a 3% sales increase to $6.2 billion, with acquisitions contributing significantly to growth, though Climate Technologies experienced a slight decline.
What is Emerson's approach to acquisitions and divestitures?
Emerson continues to engage in strategic portfolio repositioning. In 2019, the company acquired eight businesses, all within the Automation Solutions segment, for $469 million. This aligns with their strategy to enhance technology offerings and market position, particularly in industrial automation and solutions.
06—Continue