Summary
Emerson Electric Co. reported its financial results for the nine months ended June 30, 2017, highlighting significant portfolio changes and the impact of strategic acquisitions and divestitures. The company saw an increase in net sales to $10.83 billion for the nine-month period, up 2% from the prior year, driven by acquisitions and favorable conditions in its Commercial & Residential Solutions segment. However, net earnings attributable to common stockholders decreased by 15% to $1.01 billion, largely due to the impact of discontinued operations and first-year acquisition accounting charges. The company successfully completed the strategic repositioning of its portfolio, including the divestiture of its network power systems and power generation, motors, and drives businesses, and the significant acquisition of Pentair's valves & controls business. This strategic shift aims to transform Emerson into a more focused enterprise with enhanced growth prospects. Financially, Emerson demonstrated improved working capital and a stronger current ratio, bolstered by proceeds from divestitures. While operating cash flow from continuing operations increased, total cash provided by operating activities was lower due to significant cash usage in discontinued operations related to divestiture costs and tax implications. The company's outlook for fiscal year 2017 projects net sales growth of approximately 5% and reiterates its commitment to strategic growth initiatives and operational efficiency, signaling a focus on long-term value creation.
Financial Highlights
52 data points| Revenue | $4.04B |
| Cost of Revenue | $2.36B |
| Gross Profit | $1.68B |
| SG&A Expenses | $931.00M |
| Operating Income | $407.00M |
| Net Income | $413.00M |
| EPS (Basic) | $0.64 |
| EPS (Diluted) | $0.64 |
| Shares Outstanding (Basic) | 642.80M |
| Shares Outstanding (Diluted) | 643.80M |
Key Highlights
- 1Net sales for the nine months ended June 30, 2017, increased by 2% to $10.83 billion, driven by acquisitions and growth in the Commercial & Residential Solutions segment.
- 2Net earnings attributable to common stockholders decreased by 15% to $1.01 billion for the nine-month period, impacted by discontinued operations and acquisition-related charges.
- 3Completed the acquisition of Pentair's valves & controls business for $2.96 billion, significantly expanding the Automation Solutions segment.
- 4Divested the network power systems and power generation, motors, and drives businesses, classifying them as discontinued operations.
- 5Operating cash flow from continuing operations increased by $141 million to $1.79 billion, supporting dividends and capital expenditures.
- 6Debt-to-total capital ratio improved significantly to 39.3% from 46.7% due to proceeds from divestitures.
- 7The company updated its fiscal year 2017 outlook, expecting net sales to be up approximately 5% and earnings per share from continuing operations between $2.48 to $2.52.