What were the main drivers of the sales decline in the first quarter of fiscal 2009?

The primary drivers for the sales decline were unfavorable foreign currency translation due to a stronger U.S. dollar and a significant slowdown in U.S. consumer markets, which heavily impacted the Climate Technologies and Appliance and Tools segments. While international sales saw growth, it was not enough to offset the domestic decline and currency headwinds.

Why did net earnings decrease so significantly year-over-year?

The substantial decrease in net earnings was primarily driven by a significant increase in 'Other deductions, net.' This was mainly due to higher rationalization costs in the current period ($43 million compared to $9 million in the prior year) and the absence of substantial non-recurring gains ($64 million in the prior year) that boosted earnings in the previous period.

How is the company managing its financial position in the current economic climate?

Emerson Electric highlights its strong financial position with substantial cash reserves and stockholders' equity. They are actively managing cash flow, indicated by a decrease in operating cash flow but still generating significant amounts. The company has also issued new debt to fund general corporate purposes and repay borrowings, and is implementing rationalization programs to improve efficiency and manage costs in anticipation of continued economic challenges.

What is the outlook for Emerson Electric for the remainder of fiscal year 2009?

The company forecasts full-year 2009 sales to be between $23 billion and $23.7 billion, representing a decrease from 2008. Earnings per share are projected to be in the range of $2.70 to $2.95. Management expects continued rationalization expenses and is focused on managing costs and cash flow amidst ongoing economic uncertainty.

EMR 10-Q Quarterly Report Q1 FY2009 — Revenue, Net Income, EPS

Summary

Emerson Electric Co. reported its first quarter fiscal year 2009 results, reflecting a challenging economic environment. Net sales for the quarter ended December 31, 2008, decreased by 2% year-over-year to $5.42 billion, primarily impacted by unfavorable foreign currency translation and a decline in U.S. consumer markets. Despite the sales dip, the company saw strong underlying sales growth internationally, particularly in Asia and Latin America, which helped offset a decline in U.S. sales. Net earnings experienced a significant 19% decrease to $458 million, or $0.60 per diluted share, compared to the prior year period. This decline was largely attributed to increased rationalization costs and lower non-recurring gains compared to the prior year. Financially, Emerson Electric maintains a strong position with $1.67 billion in cash and equivalents and $8.40 billion in total stockholders' equity. The company continues to generate substantial operating cash flow, though it decreased to $319 million for the quarter. Management highlighted ongoing efforts to improve operational efficiency and manage costs amidst the economic downturn, with plans for approximately $175 million to $200 million in rationalization expenses for fiscal year 2009. The company has also issued new debt to manage its capital structure and repay commercial paper.

Financial Highlights

27 data points

Beta

Revenue

$5.21B

0.4% Gross Margin

Net Income

$458.00M

0.1% Net Margin

EPS (Diluted)

$0.60

Cash & Equivalents

$1.67B

Free Cash Flow

$187.00M

Financial Statements

Beta

Revenue	$5.21B
Cost of Revenue	$3.42B
Gross Profit	$1.96B
SG&A Expenses	$1.19B
Operating Income	$456.00M
Net Income	$458.00M
EPS (Basic)	$0.60
EPS (Diluted)	$0.60

Key Highlights

1Net sales declined 2% year-over-year to $5.42 billion, impacted by unfavorable foreign currency translation and a weak U.S. market, though international sales showed strength.
2Net earnings fell 19% to $458 million ($0.60 per diluted share) due to increased rationalization costs and lower prior-year gains.
3The Process Management segment showed robust growth with an 8% sales increase and a 17% earnings increase.
4Segments like Climate Technologies and Appliance and Tools experienced significant sales and earnings declines, largely due to the U.S. consumer market slowdown.
5Operating cash flow decreased by $104 million year-over-year to $319 million.
6The company is projecting full-year 2009 sales between $23 billion and $23.7 billion and earnings per share between $2.70 and $2.95.
7Emerson Electric continues to repurchase shares, with over 12.8 million shares repurchased in the quarter.

EMERSON ELECTRIC CO Quarterly Report for Q1 Ended Dec 31, 2008

Summary

Financial Highlights

Key Highlights

Frequently Asked Questions