Summary
Emerson Electric Co. reported a challenging fiscal first quarter for the period ending December 31, 2015. Net sales declined significantly by 16% year-over-year to $4.71 billion, driven by a 9% decrease in underlying sales, amplified by a 4% negative currency impact and 3% from divestitures. This sales decline was attributed to ongoing global industrial capital spending weakness, particularly in energy markets due to low oil prices, and sluggish demand in emerging markets. Net earnings applicable to common stockholders saw a substantial decrease of 34% to $349 million, resulting in diluted earnings per share of $0.53, down from $0.75 in the prior year period. Excluding separation costs related to portfolio repositioning, adjusted EPS was $0.56. The company is navigating a strategic portfolio repositioning, including plans to spin off its Network Power business and explore strategic alternatives for other divisions. While the company anticipates continued market headwinds in fiscal 2016, it projects adjusted EPS of $3.05 to $3.25 for the full year.
Financial Highlights
52 data points| Revenue | $3.34B |
| Cost of Revenue | $1.92B |
| Gross Profit | $1.41B |
| SG&A Expenses | $879.00M |
| Operating Income | $303.00M |
| Net Income | $349.00M |
| EPS (Basic) | $0.54 |
| EPS (Diluted) | $0.53 |
| Shares Outstanding (Basic) | 650.00M |
| Shares Outstanding (Diluted) | 652.50M |
Key Highlights
- 1Net sales decreased by 16% to $4.71 billion compared to the prior year's quarter, reflecting a challenging market environment.
- 2Underlying sales declined by 9%, impacted by lower volume, price, and a strong U.S. dollar.
- 3Net earnings applicable to common stockholders fell by 34% to $349 million, with diluted EPS dropping to $0.53.
- 4The company is undertaking significant portfolio repositioning, including a planned spin-off of its Network Power business and exploration of strategic alternatives for other segments.
- 5Operating cash flow decreased by 15% to $487 million, impacting free cash flow, which was $342 million.
- 6Total debt-to-total capital increased to 50.0%, and the interest coverage ratio declined to 10.3X.
- 7The company provided a fiscal 2016 outlook expecting reported sales to decline by 6-9% and adjusted EPS of $3.05-$3.25, excluding separation costs.