01—Abstract
Summary
Summary of the 10-K filed November 13, 2023. Cited figures are marked; the original filing is the authoritative source.
Emerson Electric Co. (EMR) reported a robust fiscal year 2023, demonstrating significant portfolio transformation and strong operational performance.
The company's strategic focus on becoming a global automation leader has been underscored by substantial acquisitions and divestitures, most notably the recent acquisition of National Instruments (NI) for $8.2 billiona and the majority stake sale of its Climate Technologies business. Financially, Emerson saw a 10% increase in net sales to $15.2 billion, driven by strong growth across its Intelligent Devices and Software and Control segments. Diluted earnings per share from continuing operations rose 18% to $3.72, with adjusted diluted EPS reaching $4.44.
The company also generated substantial operating cash flow of $2.7 billionb, highlighting its strong cash-generating capabilities. Looking ahead to fiscal year 2024, Emerson anticipates continued sales growth and earnings per share improvement, supported by the integration of NI and ongoing operational efficiencies.
02—Key points
Key Highlights
- Completed the $8.2 billion acquisition of National Instruments (NI) to enhance its automation and test and measurement capabilities.
- Successfully divested a majority stake in its Climate Technologies business for $14.0 billion, retaining a 40% interest.
- Reported a 10% increase in net sales to $15.2 billion for fiscal year 2023, driven by strong performance in Intelligent Devices and Software and Control segments.
- Achieved a 14% increase in net earnings from continuing operations to $2.15 billion, with diluted EPS from continuing operations up 18% to $3.72.
- Generated $2.7 billion in operating cash flow from continuing operations, a 33% increase year-over-year.
- Increased R&D spending to 6.9% of sales in 2023, signaling a commitment to innovation and future growth initiatives.
- Maintained a strong balance sheet with total assets of $43 billion and stockholders' equity of $21 billion, supported by a reduced debt-to-total capital ratio of 28.3%.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2023, Emerson Electric Co kept $0.87.
- Revenue$15.16B100.0%
- Cost of revenue−$7.74B51.0%
- Gross profit$7.43B49.0%
- Operating costs−$5.14B33.9%
- Operating income$2.29B15.1%
- Interest, other & tax$10.93B72.1%
- Net income$13.22B87.2%
Where FY2023 revenue went
$15.16B- Cost of revenue: $7.74B, 51% of revenue
- SG&A: $4.19B, 28% of revenue
- Operating income: $2.29B, 15% of revenue
- R&D: $523.0M, 3.4% of revenue
- Other operating costs: $432.0M, 2.8% of revenue
Kept 15% as operating income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2023filed November 13, 2023Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $15.16B$13.80B | +9.9% |
| Cost of Revenue | $7.74B$7.50B | +3.2% |
| Gross Profit | $7.43B$6.31B | +17.8% |
| R&D Expenses | $523.00M$385.00M | +35.8% |
| SG&A Expenses | $4.19B$3.61B | +15.8% |
| Operating Income | $2.29B$1.89B | +21.2% |
| Net Income | $13.22B$3.23B | +309.1% |
| EPS (Basic) | $23.00$5.44 | +322.8% |
| EPS (Diluted) | $22.88$5.41 | +322.9% |
| Shares Outstanding (Basic) | 574.20M592.90M | −3.2% |
| Shares Outstanding (Diluted) | 577.30M596.30M | −3.2% |
05—Questions
Frequently Asked Questions
What were the key strategic portfolio changes Emerson made in fiscal year 2023?
Emerson significantly reshaped its portfolio in fiscal year 2023. The most notable transaction was the acquisition of National Instruments (NI) for $8.2 billion, aimed at strengthening its automation and software offerings. Additionally, Emerson completed the sale of a majority stake in its Climate Technologies business for $14.0 billion, while retaining a 40% non-controlling interest. These moves are part of Emerson's strategy to focus on higher-growth automation markets.
How did Emerson's financial performance fare in fiscal year 2023?
Emerson reported strong financial results for fiscal year 2023. Net sales increased by 10% to $15.2 billion, driven by growth across its key segments. Net earnings from continuing operations rose 14% to $2.15 billion, leading to a 18% increase in diluted EPS from continuing operations to $3.72. The company also demonstrated robust cash generation, with operating cash flow from continuing operations increasing 33% to $2.7 billion.
What is Emerson's outlook for fiscal year 2024?
Emerson projects continued growth in fiscal year 2024. The company anticipates consolidated net sales to increase by 13% to 15.5%, with underlying sales expected to grow 4% to 6%, excluding foreign currency impacts and including the contribution from the NI acquisition. Diluted earnings per share are forecasted to be between $3.82 and $4.02, and adjusted diluted earnings per share are expected to range from $5.15 to $5.35. Operating cash flow is projected to be between $3.0 billion and $3.1 billion.
How has Emerson addressed its environmental sustainability goals?
Emerson has set an ambitious target to achieve net zero greenhouse gas (GHG) emissions across its value chain by 2045, with interim targets for net zero operations and a 25% reduction in value chain emissions by 2030. The company has also established a goal to achieve zero waste to landfill in its manufacturing facilities by 2032. These initiatives are driven by their 'Greening Of, Greening By, Greening With' framework, focusing on internal performance improvement, enabling customer sustainability, and fostering stakeholder collaboration.
06—Continue