What were the main drivers of the sales growth in the third quarter of fiscal year 2021?

Sales growth in the third quarter of fiscal year 2021 was primarily driven by a 20% increase in net sales to $4.7 billion. This was supported by strong underlying sales growth of 15%, favorable foreign currency translation (4%), and the contribution from the OSI acquisition (1%). Both the Automation Solutions and Commercial & Residential Solutions segments experienced significant sales increases.

How did Emerson's profitability change compared to the prior year?

Emerson's profitability saw a significant improvement. Net earnings common stockholders increased by 57% to $627 million in the third quarter, and diluted EPS rose by 55% to $1.04. This was due to higher sales volumes, strong segment margins resulting from effective cost-reduction and restructuring actions, and a favorable impact from lower restructuring costs and foreign currency translation, partially offset by a higher tax rate and acquisition accounting charges.

What is the company's outlook for the remainder of fiscal year 2021?

For the full fiscal year 2021, Emerson expects continued improvement in industrial and commercial demand. Consolidated net sales are projected to increase by 9-10%, with underlying sales up 5-6%. The company anticipates earnings per share to be between $3.78 and $3.80, and adjusted earnings per share between $4.06 and $4.08. Operational cash flow is forecasted to be approximately $3.6 billion, and free cash flow approximately $3.0 billion.

What significant acquisitions or divestitures were completed during the reported period?

The most significant acquisition was Open Systems International, Inc. (OSI) for approximately $1.6 billion, which closed on October 1, 2020. OSI is a leading operations technology software provider in the global power industry and is reported in the Automation Solutions segment. The company also acquired the remaining interest of an equity investment for approximately $19 million. There was no mention of significant divestitures in this filing period.

EMR 10-Q Quarterly Report Q3 FY2021 — Revenue, Net Income, EPS

Summary

Emerson Electric Co. reported strong financial results for the third quarter and first nine months of fiscal year 2021, demonstrating significant year-over-year growth across key metrics. Net sales increased by 20% in the third quarter and 9% for the nine-month period, driven by robust underlying sales growth and the strategic acquisition of Open Systems International (OSI). The company also benefited from favorable foreign currency translation. Net earnings common stockholders saw substantial increases, up 57% for the quarter and 31% for the nine months, with diluted EPS rising accordingly. This performance was fueled by strong operational execution, including the successful implementation of cost-reduction and restructuring initiatives, which improved segment margins and overall profitability. The company also highlighted its strong financial position, with improved debt-to-capital ratios and a robust interest coverage ratio, providing flexibility for future investments and growth. Looking ahead, Emerson anticipates continued demand improvement for the remainder of fiscal 2021, despite ongoing challenges related to material costs, supply chain, and logistics. The company projects full-year net sales growth of 9-10%, with underlying sales expected to increase by 5-6%. Management is confident in their ability to navigate inflationary pressures and deliver continued growth, supported by strategic investments in key growth areas and ongoing operational efficiencies. The outlook for earnings per share is also positive, reflecting the company's commitment to shareholder value.

Financial Highlights

52 data points

Beta

Revenue

$4.70B

0.4% Gross Margin

Net Income

$627.00M

0.1% Net Margin

EPS (Diluted)

$1.04

Total Assets

$24.48B

Cash & Equivalents

$2.86B

Free Cash Flow

$977.00M

Financial Statements

Beta

Revenue	$4.70B
Cost of Revenue	$2.71B
Gross Profit	$1.98B
SG&A Expenses	$1.07B
Net Income	$627.00M
EPS (Basic)	$1.05
EPS (Diluted)	$1.04
Shares Outstanding (Basic)	598.20M
Shares Outstanding (Diluted)	602.10M

Key Highlights

1Net sales increased by 20% to $4.7 billion in Q3 FY2021 and by 9% to $13.3 billion for the first nine months of FY2021.
2Diluted EPS grew significantly, up 55% to $1.04 for Q3 FY2021 and 33% to $2.71 for the first nine months of FY2021.
3Underlying sales (excluding currency and acquisitions/divestitures) increased by 15% in Q3 FY2021, indicating strong organic growth.
4The acquisition of Open Systems International (OSI) contributed positively, adding 1% to Q3 net sales and 1% to nine-month net sales.
5Gross margin improved to 42.2% in Q3 FY2021 from 41.3% in the prior year, driven by higher sales volume and cost savings.
6Operating cash flow for the first nine months of FY2021 was $2.7 billion, an increase of $866 million year-over-year.
7Total debt-to-total capital decreased to 44.0% as of June 30, 2021, down from 48.0% a year prior, indicating a strengthening balance sheet.

EMERSON ELECTRIC CO Quarterly Report for Q3 Ended Jun 30, 2021

Summary

Financial Highlights

Key Highlights

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