Summary
Emerson Electric Co. reported its third-quarter and nine-month results for fiscal year 2013, ending June 30, 2013. For the third quarter, net sales decreased by 2% to $6.3 billion, primarily impacted by challenging global macroeconomic trends and sluggish business environments. Net earnings for common stockholders significantly declined by 75% to $194 million, or $0.27 per diluted share, largely due to a substantial non-cash goodwill impairment charge of $503 million related to the embedded computing and power business. Excluding this charge, adjusted net earnings were $702 million, down 9% from the prior year. The nine-month period showed a 1% increase in net sales to $17.9 billion, but net earnings common stockholders decreased by 28% to $1.21 billion, or $1.66 per diluted share, also heavily influenced by the aforementioned goodwill impairment. Operationally, the company experienced mixed segment performance. Process Management and Climate Technologies saw modest sales growth for the nine-month period, while Industrial Automation and Network Power faced declines due to weak end markets, particularly in Europe. The company is in the process of selling a 51% controlling interest in its embedded computing and power business, expecting to close the transaction within three to six months, with proceeds intended for share repurchases. Despite the near-term headwinds, Emerson maintained a positive outlook for improving business investment and projected modest growth in various end markets for the remainder of fiscal 2013, targeting operating cash flow of approximately $3.4 billion.
Financial Highlights
53 data points| Revenue | $6.34B |
| Cost of Revenue | $3.78B |
| Gross Profit | $2.57B |
| SG&A Expenses | $1.40B |
| Operating Income | $194.00M |
| Net Income | $194.00M |
| EPS (Basic) | $0.27 |
| EPS (Diluted) | $0.27 |
| Shares Outstanding (Basic) | 716.90M |
| Shares Outstanding (Diluted) | 722.20M |
Key Highlights
- 1Third-quarter net sales decreased by 2% to $6.34 billion compared to the prior year, reflecting a challenging global business environment.
- 2Significant goodwill impairment charge of $503 million recognized in the third quarter, primarily impacting the Network Power segment's embedded computing and power business.
- 3Net earnings for common stockholders in Q3 declined sharply by 75% to $194 million ($0.27/share), heavily affected by the $503 million goodwill impairment charge.
- 4For the first nine months of fiscal 2013, net sales increased 1% to $17.86 billion, while net earnings common stockholders decreased 28% to $1.21 billion ($1.66/share).
- 5The company is proceeding with the sale of a 51% controlling interest in its embedded computing and power business, expected to close within 3-6 months.
- 6Operating cash flow for the nine-month period increased by 23% to $2.15 billion, supporting capital expenditures, dividends, and share repurchases.
- 7Despite the charges, underlying sales growth was positive for the nine months, driven by Process Management and Climate Technologies, while Industrial Automation and Network Power faced headwinds.