10-KPeriod: FY2024

EMERSON ELECTRIC CO Annual Report, Year Ended Sep 30, 2024

Filed November 12, 2024For Securities:EMR

Summary

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 billion, 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 billion, 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 billion 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.

Financial Highlights

57 data points
Beta

Revenue

$17.49B

50.8% Gross Margin

Net Income

$1.97B

11.3% Net Margin

EPS (Diluted)

$3.43

Total Assets

$44.25B

Cash & Equivalents

$3.59B

Free Cash Flow

$2.91B

Financial Statements
Beta
Revenue$17.49B
Cost of Revenue$8.61B
Gross Profit$8.88B
R&D Expenses$781.00M
SG&A Expenses$5.14B
Operating Income$1.62B
Net Income$1.97B
EPS (Basic)$3.44
EPS (Diluted)$3.43
Shares Outstanding (Basic)571.30M
Shares Outstanding (Diluted)574.00M

Key Highlights

  • 1Emerson completed the acquisition of National Instruments (NI) for $8.2 billion, strengthening its Software and Control segment with automated test and measurement capabilities.
  • 2Net sales increased by 15% to $17.5 billion, driven by the NI acquisition and underlying sales growth.
  • 3Net earnings from continuing operations decreased by 29% to $1.6 billion, attributed to acquisition-related costs and a loss on the Copeland note receivable.
  • 4Adjusted diluted earnings per share from continuing operations grew by 24% to $5.49, reflecting strong operational performance.
  • 5Operating cash flow rose by 22% to $3.3 billion, and free cash flow increased by 23% to $2.9 billion, indicating strong cash generation.
  • 6The company is exploring strategic alternatives for its Safety & Productivity segment and has proposed acquiring the remaining stake in AspenTech.
  • 7Emerson announced a proposal to acquire the remaining shares of AspenTech for $240 per share in cash.

Frequently Asked Questions

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.

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.

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.

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.