How did Emerson's top-line performance compare to the previous year?

Net sales for the three months ended December 31, 2014, were $5,587 million, a slight decrease of $19 million or essentially flat compared to $5,606 million in the prior year. However, underlying sales grew by 6% driven by volume increases, indicating underlying business strength despite negative impacts from foreign currency translation and prior year divestitures.

What is the impact of the divestiture of the power transmission solutions business?

Emerson completed the sale of its mechanical power transmission solutions business for approximately $1.4 billion on January 30, 2015. The after-tax proceeds of approximately $1 billion are expected to be used for share repurchases. This business had sales of $605 million and earnings before income taxes of $87 million in fiscal year 2014. The divestiture is expected to reduce reported sales by approximately 2% in fiscal year 2015.

How is Emerson managing its costs and expenses?

The company demonstrated effective cost management. Cost of sales decreased, contributing to a higher gross profit margin of 40.8%. Selling, general, and administrative (SG&A) expenses also decreased by $39 million, and as a percentage of sales, they improved to 25.1% from 25.8% in the prior year, partly due to reduced incentive stock compensation and favorable comparative impacts from prior year actions.

What is Emerson's outlook for the full fiscal year 2015?

Emerson projects 3-5% underlying sales growth for fiscal year 2015. However, due to expected negative currency translation (4-5%) and the divestiture of the power transmission solutions business (2%), reported sales are anticipated to decline by 1-4%. Full-year earnings per share are forecasted to be in the range of $4.50 to $4.60.

EMR 10-Q Quarterly Report Q1 FY2015 — Revenue, Net Income, EPS

Summary

Emerson Electric Co. reported a solid first quarter for fiscal year 2015, ending December 31, 2014, with net earnings for common stockholders increasing by 14% to $525 million, or $0.75 per diluted share, up 15% from the prior year. While net sales remained largely flat at $5,587 million, this was impacted by currency headwinds and prior year divestitures. The company achieved a 6% underlying sales growth, driven by strengths in the U.S. and Asia, particularly in the energy and air conditioning sectors. The company is actively managing its portfolio, having completed the sale of its mechanical power transmission solutions business for approximately $1.4 billion, with expected use of proceeds for share repurchases. This strategic divestiture, along with ongoing operational efficiencies, contributed to improved gross profit margins and reduced SG&A expenses. Emerson maintains a conservative financial structure and provided an outlook for 3-5% underlying sales growth in fiscal year 2015, alongside an expected earnings per share range of $4.50 to $4.60.

Financial Highlights

52 data points

Beta

Revenue

$4.03B

0.4% Gross Margin

Net Income

$525.00M

0.1% Net Margin

EPS (Diluted)

$0.75

Total Assets

$23.72B

Cash & Equivalents

$3.12B

Free Cash Flow

$364.00M

Financial Statements

Beta

Revenue	$4.03B
Cost of Revenue	$3.31B
Gross Profit	$1.74B
SG&A Expenses	$1.41B
Operating Income	$452.00M
Net Income	$525.00M
EPS (Basic)	$0.76
EPS (Diluted)	$0.75
Shares Outstanding (Basic)	691.40M
Shares Outstanding (Diluted)	694.70M

Key Highlights

1Net earnings for common stockholders increased 14% to $525 million ($0.75 per diluted share, up 15%) for the quarter.
2Net sales were essentially flat at $5,587 million, but underlying sales grew 6% driven by U.S. and Asia market strength.
3The company completed the divestiture of its mechanical power transmission solutions business for approximately $1.4 billion, with proceeds expected for share repurchases.
4Gross profit margin improved by 0.9 percentage points to 40.8% due to favorable divestiture effects and purchase accounting.
5Selling, general, and administrative (SG&A) expenses decreased by $39 million, with SG&A as a percentage of sales improving.
6Emerson expects 3-5% underlying sales growth for fiscal year 2015, with reported sales projected to decline 1-4% due to currency and divestitures.
7The company provided an outlook for full-year 2015 earnings per share in the range of $4.50 to $4.60.

EMERSON ELECTRIC CO Quarterly Report for Q1 Ended Dec 31, 2014

Summary

Financial Highlights

Key Highlights

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