Summary
Emerson Electric Co. reported its financial results for the quarter and six months ended March 31, 2014. For the second quarter, net sales decreased 2% to $5.8 billion, primarily due to the divestiture of the embedded computing and power business, though underlying sales grew 2%. Net earnings attributable to common stockholders were $547 million, a 2% decrease, and diluted EPS remained flat at $0.77. For the first six months, net sales declined 1% to $11.4 billion, with underlying sales up 2%. Net earnings attributable to common stockholders decreased 1% to $1.0 billion, while diluted EPS increased 2% to $1.42. The company experienced mixed performance across its segments. Process Management and Climate Technologies showed sales growth, bolstered by acquisitions in Process Management and strong demand in Climate Technologies. Network Power saw a significant sales decline primarily due to the divestiture. Industrial Automation and Commercial & Residential Solutions reported modest sales increases. The company highlighted its ongoing strategic acquisitions, including Virgo Valves and Controls and Enardo LLC, and the full acquisition of EGS Electrical Group, while also completing the divestiture of a majority stake in its embedded computing and power business. Operationally, Emerson reported improved gross profit margins due to cost containment and favorable impacts from the divestiture. However, other deductions, net, increased significantly, driven by foreign currency volatility and an equity investment loss. The company's financial condition remains solid, with operating cash flow of $1.3 billion for the six-month period and a newly established $3.5 billion revolving credit facility, underscoring its financial flexibility.
Financial Highlights
52 data points| Revenue | $5.81B |
| Cost of Revenue | $3.42B |
| Gross Profit | $2.40B |
| SG&A Expenses | $1.39B |
| Net Income | $547.00M |
| EPS (Basic) | $0.78 |
| EPS (Diluted) | $0.77 |
| Shares Outstanding (Basic) | 701.70M |
| Shares Outstanding (Diluted) | 705.20M |
Key Highlights
- 1Net sales for the second quarter of fiscal 2014 were $5.8 billion, a 2% decrease compared to the prior year, primarily influenced by the divestiture of the embedded computing and power business, though underlying sales grew by 2%.
- 2Net earnings attributable to common stockholders for the quarter were $547 million, down 2% year-over-year, while diluted earnings per share remained flat at $0.77.
- 3For the six-month period ended March 31, 2014, net sales were $11.4 billion, a 1% decrease, with underlying sales growing 2%. Diluted EPS for the period increased 2% to $1.42.
- 4The company completed significant strategic transactions, including the divestiture of a 51% interest in its embedded computing and power business and the acquisition of Virgo Valves and Controls and Enardo LLC.
- 5Gross profit margin improved to 41.2% in the second quarter, up from 39.8% in the prior year, driven by cost containment and the favorable impact of the divestiture.
- 6Operating cash flow for the first six months of fiscal 2014 was $1.3 billion, a 4% increase, supporting capital expenditures, dividends, and share repurchases.
- 7Emerson Electric Co. entered into a new $3.5 billion five-year revolving credit facility in April 2014, enhancing its financial flexibility for general corporate purposes.