Summary
Emerson Electric Co. reported solid revenue growth for the nine months ended June 30, 2019, with net sales reaching $13.4 billion, a 7% increase year-over-year. This growth was driven by a combination of underlying sales increase and strategic acquisitions, particularly in the Automation Solutions and Commercial & Residential Solutions segments. While net sales showed a healthy upward trend, net earnings for common stockholders remained flat at $1.6 billion for the nine-month period, with diluted earnings per share seeing a modest 2% increase to $2.55. The company's financial position strengthened with an increase in working capital to $1.13 billion and a current ratio of 1.2. However, debt-to-capital ratios rose to 41.5% due to increased borrowings to support share repurchases. Free cash flow saw a slight decrease to $1.4 billion for the nine-month period, impacted by increased capital expenditures and a decrease in operating cash flow. Emerson continues to focus on strategic acquisitions and operational efficiency, anticipating continued strength in process and hybrid end markets, while acknowledging potential headwinds from global economic uncertainty and trade tensions.
Financial Highlights
53 data points| Revenue | $4.68B |
| Cost of Revenue | $2.68B |
| Gross Profit | $2.00B |
| SG&A Expenses | $1.13B |
| Net Income | $604.00M |
| EPS (Basic) | $0.98 |
| EPS (Diluted) | $0.97 |
| Shares Outstanding (Basic) | 614.30M |
| Shares Outstanding (Diluted) | 619.00M |
Key Highlights
- 1Net sales increased by 7% to $13.4 billion for the nine months ended June 30, 2019, driven by underlying sales growth and strategic acquisitions.
- 2Net earnings for common stockholders remained flat at $1.6 billion for the nine-month period, while diluted EPS increased by 2% to $2.55.
- 3The Automation Solutions segment saw an 8% increase in sales, largely due to acquisitions and strong demand in energy-related and industrial markets.
- 4Commercial & Residential Solutions segment sales grew by 5%, primarily driven by acquisitions, despite a dip in Climate Technologies sales due to lower demand in Asia.
- 5Debt-to-capital ratios increased to 41.5% due to borrowings for share repurchases, though the interest coverage ratio remained strong at 14.3X.
- 6Free cash flow for the nine months decreased to $1.4 billion, reflecting higher capital expenditures and a decrease in operating cash flow.
- 7The company expects full-year consolidated net sales to increase by approximately 6%, with underlying sales up 3%.