What were the main drivers of the significant increase in net sales?

The substantial increase in net sales was primarily driven by strong performance in the Automation Solutions segment, which saw a 26% rise in sales. Strategic acquisitions, such as Paradigm and the valves & controls business, also contributed significantly to sales growth. Underlying sales growth, reflecting higher volume and favorable global demand, further bolstered the top line.

How did the U.S. Tax Cuts and Jobs Act impact Emerson Electric's financial results?

The Tax Cuts and Jobs Act had a significant positive impact, resulting in a net tax benefit of $193 million ($0.30 per share) for the nine months ended June 30, 2018. This benefit stemmed from a reduction in the U.S. corporate income tax rate and adjustments related to the deemed repatriation of foreign earnings, particularly an increase in foreign tax credit carryforwards.

What is the company's outlook for the remainder of fiscal year 2018?

Emerson Electric anticipates continued strong performance for the full fiscal year 2018. The company expects consolidated net sales to increase by approximately 14%, with underlying sales up about 7.5%. Full-year earnings per share are projected to be between $3.30 and $3.40, which includes the benefit from the U.S. tax reform. Operating cash flow is expected to be around $2.9 billion.

How has the company's financial condition changed, particularly regarding debt?

The company's debt-to-capital ratios increased from 34.8% to 41.6% as of June 30, 2018, compared to September 30, 2017. This increase is attributed to higher borrowings used to finance acquisitions and share repurchases. Despite the rise in debt, the interest coverage ratio improved to 14.0x, indicating strong ability to service its debt.

EMR 10-Q Quarterly Report Q3 FY2018 — Revenue, Net Income, EPS

Summary

Emerson Electric Co. reported robust financial performance for the nine months ended June 30, 2018, with significant increases in net sales and net earnings compared to the prior year. Net sales grew by 16% to $12.5 billion, driven by strong performance in the Automation Solutions segment and contributions from acquisitions, partially offset by the divestiture of the residential storage business. Net earnings common stockholders more than doubled, reaching $1.6 billion, a 56% increase, reflecting solid operational execution, strategic acquisitions, and a significant positive impact from the U.S. Tax Cuts and Jobs Act. The company also demonstrated strong cash flow generation, with operating cash flow from continuing operations increasing to $1.9 billion. This robust cash flow supported substantial investments in acquisitions, share repurchases, and dividends, underscoring a healthy financial position and a commitment to returning value to shareholders. The company's outlook for the full fiscal year 2018 projects continued growth in net sales and earnings per share, signaling confidence in its strategic direction and market positioning.

Financial Highlights

53 data points

Beta

Revenue

$4.46B

0.4% Gross Margin

Net Income

$712.00M

0.2% Net Margin

EPS (Diluted)

$1.12

Total Assets

$20.49B

Cash & Equivalents

$3.41B

Free Cash Flow

$804.00M

Financial Statements

Beta

Revenue	$4.46B
Cost of Revenue	$2.51B
Gross Profit	$1.94B
SG&A Expenses	$1.06B
Operating Income	$712.00M
Net Income	$712.00M
EPS (Basic)	$1.13
EPS (Diluted)	$1.12
Shares Outstanding (Basic)	629.40M
Shares Outstanding (Diluted)	632.90M

Key Highlights

1Net sales increased by 16% to $12.5 billion for the first nine months of fiscal 2018 compared to the same period in 2017.
2Net earnings attributable to common stockholders surged by 56% to $1.6 billion for the first nine months of fiscal 2018.
3Diluted earnings per share from continuing operations grew by 41% to $2.49 for the first nine months of fiscal 2018.
4Operating cash flow from continuing operations increased to $1.9 billion for the first nine months of fiscal 2018.
5The company completed significant acquisitions, including Paradigm and Cooper-Atkins, contributing to sales growth.
6The U.S. Tax Cuts and Jobs Act provided a net tax benefit of $193 million ($0.30 per share) for the nine months ended June 30, 2018.
7The company repatriated $800 million of cash held by non-U.S. subsidiaries in May 2018 to fund acquisitions and other corporate needs.

EMERSON ELECTRIC CO Quarterly Report for Q3 Ended Jun 30, 2018

Summary

Financial Highlights

Key Highlights

Frequently Asked Questions