Summary
Emerson Electric Co. reported its financial results for the quarter ended December 31, 2016. The company experienced a 4% decline in net sales, primarily driven by a 9% decrease in its Automation Solutions segment, which was impacted by lower capital spending in energy-related markets. Conversely, the Commercial & Residential Solutions segment saw a 6% increase in sales, benefiting from favorable conditions in HVAC, refrigeration, and construction markets. Despite lower sales, earnings from continuing operations saw a significant 20% increase, reaching $364 million, with diluted EPS from continuing operations rising to $0.56. This improvement was supported by cost reduction initiatives and a favorable tax benefit. However, net earnings decreased by 12% to $309 million, largely due to the impact of discontinued operations, which included a net loss of $55 million for the quarter. The company also completed the sale of its Network Power business and expects to complete the acquisition of Pentair's Valves & Controls business. Emerson is strategically repositioning its portfolio, focusing on its core platforms. The company's financial position has been strengthened by the proceeds from asset sales, providing flexibility for future investments and acquisitions. The outlook for fiscal year 2017 anticipates continued challenges but also points to improving market conditions in the latter half of the year.
Financial Highlights
52 data points| Revenue | $3.22B |
| Cost of Revenue | $1.85B |
| Gross Profit | $1.36B |
| SG&A Expenses | $822.00M |
| Operating Income | $364.00M |
| Net Income | $309.00M |
| EPS (Basic) | $0.48 |
| EPS (Diluted) | $0.48 |
| Shares Outstanding (Basic) | 642.80M |
| Shares Outstanding (Diluted) | 644.30M |
Key Highlights
- 1Net sales decreased by 4% to $3,216 million, primarily due to a 9% decline in the Automation Solutions segment, impacted by lower energy market spending.
- 2Commercial & Residential Solutions segment sales increased by 6% to $1,252 million, driven by growth in Climate Technologies.
- 3Earnings from continuing operations common stockholders increased by 20% to $364 million, with diluted EPS from continuing operations rising 22% to $0.56.
- 4Net earnings common stockholders decreased by 12% to $309 million, largely influenced by a $55 million loss from discontinued operations.
- 5The company completed the sale of its Network Power business for $4 billion and its Power Generation, Motors and Drives business for $1.2 billion, reclassifying them as discontinued operations.
- 6Emerson expects to close the acquisition of Pentair's Valves & Controls business for $3.15 billion, which is expected to complement its Automation Solutions segment.
- 7The effective tax rate decreased to 20% from 29% due to a significant $47 million tax benefit from restructuring a foreign subsidiary.