EMERSON ELECTRIC CO Quarterly Report for Q1 Ended Dec 31, 2017

Summary

Emerson Electric Co. (EMR) reported strong performance for the first quarter of fiscal year 2018, ending December 31, 2017. Net sales increased by a significant 19% year-over-year to $3.8 billion, driven by a combination of underlying sales growth of 7% and strategic acquisitions, partially offset by a divestiture. The Automation Solutions segment was a key growth driver, with sales up 31% largely due to the acquisition of valves & controls and positive trends in energy and industrial markets. Net earnings attributable to common stockholders surged by 27% to $392 million, resulting in diluted earnings per share of $0.61, a 27% increase. This performance reflects not only operational improvements but also the positive impact of the recent U.S. tax reform, which provided a net tax benefit. The company also provided an optimistic outlook for the full fiscal year 2018, projecting consolidated net sales growth of 11-13% and earnings per share between $3.05 and $3.15.

Key Highlights

• 1Net sales increased 19% to $3.8 billion, driven by 7% underlying sales growth and acquisitions, partly offset by divestitures.
• 2Automation Solutions segment showed robust growth with sales up 31%, significantly boosted by the acquisition of valves & controls business.
• 3Net earnings attributable to common stockholders rose 27% to $392 million, with diluted EPS up 27% to $0.61.
• 4The company recognized a net tax benefit of $43 million ($0.07 per share) due to the Tax Cuts and Jobs Act of 2017.
• 5Operating cash flow from continuing operations increased by $37 million to $447 million.
• 6Free cash flow from continuing operations improved by $41 million to $351 million.
• 7Full-year fiscal 2018 outlook projects consolidated net sales growth of 11-13% and EPS of $3.05-$3.15.

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