01—Abstract
Summary
Summary of the 10-K filed November 12, 2024. Cited figures are marked; the original filing is the authoritative source.
Emerson Electric Co. (EMR) has reported its fiscal year 2024 results, showcasing a significant transformation of its business portfolio and a strategic shift towards higher-growth automation markets.
The company completed the acquisition of National Instruments (NI) for $8.2 billiona, integrating its automated test and measurement systems into the Software and Control segment. Concurrently, Emerson advanced its portfolio simplification by divesting its Climate Technologies business (Copeland) and the InSinkErator business. These strategic moves are aimed at creating a more cohesive, higher-growth, and higher-margin industrial technology portfolio, positioning Emerson as a global automation leader.
Financially, the company reported a 15% increase in net sales to $17.5 billionb, driven by the NI acquisition and underlying sales growth. However, net earnings from continuing operations declined by 29% to $1.6 billion, impacted by acquisition-related costs and a loss on a note receivable from the Copeland transaction. Adjusted diluted EPS from continuing operations showed robust growth, increasing by 24% to $5.49.
Emerson also demonstrated strong cash flow generation, with operating cash flow up 22% to $3.3 billionc and free cash flow up 23% to $2.9 billion. Looking ahead, Emerson is exploring further strategic alternatives, including a potential sale of its Safety & Productivity segment, and has proposed acquiring the remaining stake in AspenTech. The company has also announced an increase in its quarterly dividend.
02—Key points
Key Highlights
- Emerson completed the acquisition of National Instruments (NI) for $8.2 billion, strengthening its Software and Control segment with automated test and measurement capabilities.
- Net sales increased by 15% to $17.5 billion, driven by the NI acquisition and underlying sales growth.
- Net earnings from continuing operations decreased by 29% to $1.6 billion, attributed to acquisition-related costs and a loss on the Copeland note receivable.
- Adjusted diluted earnings per share from continuing operations grew by 24% to $5.49, reflecting strong operational performance.
- Operating cash flow rose by 22% to $3.3 billion, and free cash flow increased by 23% to $2.9 billion, indicating strong cash generation.
- The company is exploring strategic alternatives for its Safety & Productivity segment and has proposed acquiring the remaining stake in AspenTech.
- Emerson announced a proposal to acquire the remaining shares of AspenTech for $240 per share in cash.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, Emerson Electric Co kept $0.11.
- Revenue$17.49B100.0%
- Cost of revenue−$8.61B49.2%
- Gross profit$8.88B50.8%
- Operating costs−$7.27B41.5%
- Operating income$1.62B9.2%
- Interest, other & tax$350.0M2.0%
- Net income$1.97B11.3%
Where FY2024 revenue went
$17.49B- Cost of revenue: $8.61B, 49% of revenue
- SG&A: $5.14B, 29% of revenue
- Operating income: $1.62B, 9.2% of revenue
- R&D: $781.0M, 4.5% of revenue
- Other operating costs: $1.34B, 7.7% of revenue
Kept 9.2% as operating income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed November 12, 2024Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $17.49B$15.16B | +15.3% |
| Cost of Revenue | $8.61B$7.74B | +11.2% |
| Gross Profit | $8.88B$7.43B | +19.6% |
| R&D Expenses | $781.00M$523.00M | +49.3% |
| SG&A Expenses | $5.14B$4.19B | +22.8% |
| Operating Income | $1.62B$2.29B | −29.2% |
| Net Income | $1.97B$13.22B | −85.1% |
| EPS (Basic) | $3.44$23.00 | −85.0% |
| EPS (Diluted) | $3.43$22.88 | −85.0% |
| Shares Outstanding (Basic) | 571.30M574.20M | −0.5% |
| Shares Outstanding (Diluted) | 574.00M577.30M | −0.6% |
05—Questions
Frequently Asked Questions
What were the key strategic moves made by Emerson in fiscal year 2024?
Emerson significantly reshaped its portfolio by acquiring National Instruments (NI) for $8.2 billion, enhancing its automation capabilities, and advancing the divestiture of its Climate Technologies business (Copeland). These actions are designed to focus Emerson on higher-growth industrial technology markets.
How did the acquisition of National Instruments (NI) impact Emerson's financial performance?
The NI acquisition contributed positively to net sales, which increased by 15% to $17.5 billion. However, it also led to acquisition-related costs, including amortization of intangibles, which negatively impacted net earnings from continuing operations. Despite the GAAP earnings decline, adjusted diluted EPS from continuing operations saw a healthy increase of 24% to $5.49, reflecting the underlying operational improvements.
What is Emerson's outlook for future strategic actions?
Emerson announced a proposal to acquire the remaining outstanding shares of AspenTech for $240 per share in cash, signaling a potential full integration of this key software asset. Additionally, the company is actively exploring strategic alternatives, including a potential sale, for its Safety & Productivity segment, further demonstrating its commitment to portfolio optimization.
How is Emerson managing its cash flow and returning capital to shareholders?
Emerson demonstrated strong financial health with a 22% increase in operating cash flow to $3.3 billion and a 23% increase in free cash flow to $2.9 billion. The company plans to return approximately $2.0 billion to shareholders through share repurchases and approximately $1.2 billion in dividend payments in fiscal year 2025. The Board of Directors also approved an increase in the quarterly cash dividend.
06—Continue