Summary
Emerson Electric Co. reported for the quarter ended December 31, 2009, a decrease in net sales to $5,011 million from $5,415 million in the prior year period, a 7% decline. This was attributed to a challenging economic environment with weak gross fixed investment globally, particularly in capital goods and construction. Despite lower sales, the company saw an improvement in gross profit margin to 38.0% from 36.9%, driven by cost containment and savings from prior restructuring actions. Net earnings attributable to common stockholders decreased by 7% to $425 million, with diluted EPS at $0.56, down from $0.60 year-over-year. The company made significant strategic acquisitions during the quarter, including Avocent Corporation for $1.2 billion and SSB Group GmbH for $145 million, which contributed positively to sales but also increased debt levels. Emerson's financial position remains strong, with substantial operating cash flow generated. The company successfully managed its working capital, leading to a significant increase in operating cash flow. Despite ongoing economic headwinds, Emerson provided an optimistic outlook for fiscal 2010, forecasting sales between $20.9 billion and $21.5 billion and diluted EPS in the range of $2.20 to $2.40. The company continues to focus on cost reduction and operational efficiency to navigate the current economic climate.
Financial Highlights
52 data points| Revenue | $4.83B |
| Cost of Revenue | $2.96B |
| Gross Profit | $1.87B |
| SG&A Expenses | $1.13B |
| Operating Income | $417.00M |
| Net Income | $425.00M |
| EPS (Basic) | $0.56 |
| EPS (Diluted) | $0.56 |
| Shares Outstanding (Basic) | 750.30M |
| Shares Outstanding (Diluted) | 755.50M |
Key Highlights
- 1Net sales decreased by 7% to $5.01 billion compared to $5.42 billion in the prior year quarter, reflecting a challenging global economic environment.
- 2Gross profit margin improved to 38.0% from 36.9%, driven by cost containment and prior restructuring savings.
- 3Net earnings attributable to common stockholders declined by 7% to $425 million, with diluted EPS falling to $0.56 from $0.60.
- 4The company completed significant acquisitions, notably Avocent Corporation for $1.2 billion and SSB Group GmbH for $145 million, bolstering its offerings in IT solutions and wind turbine technology.
- 5Operating cash flow significantly increased to $687 million from $319 million, supported by improvements in operating working capital.
- 6Despite economic challenges, the company maintained a strong financial position and provided a fiscal 2010 EPS outlook of $2.20 to $2.40.
- 7Rationalization of operations expenses were $38 million for the quarter, with an expected full-year range of $150 million to $175 million.