8-KRegulation FD

EMERSON ELECTRIC CO 8-K Report, Regulation FD Disclosure (Nov 28, 2006)

Filed November 28, 2006For Securities:EMR

Summary

Emerson Electric Co. (EMR) filed a Form 8-K on November 28, 2006, to disclose its underlying order growth trends for the trailing three-month periods ending August, September, and October 2006, on a GAAP basis. This filing provides investors with a forward-looking indicator of potential future sales performance across Emerson's key business segments. The disclosed order trends indicate a general moderation in growth rates throughout the period, particularly in October. While Process Management and Industrial Automation showed continued strength, Network Power and Appliance and Tools experienced slower growth. Notably, Climate Technologies saw a significant slowdown and even a decline in orders by October, primarily attributed to challenging year-over-year comparisons in the North American air-conditioning business. Overall Emerson order growth moderated to 5% for the three months ending October, with favorable currency exchange rates contributing approximately 1% to this figure.

Key Highlights

  • 1Emerson Electric Co. reported underlying order growth trends for August, September, and October 2006.
  • 2Total Emerson order growth moderated from 10-15% in August to 5% for the three months ending October 2006.
  • 3Favorable currency exchange rates contributed approximately 1 percentage point to the October order growth.
  • 4Process Management and Industrial Automation segments demonstrated continued strong order growth.
  • 5Network Power order growth remained steady within the 5-10% range.
  • 6Climate Technologies experienced a significant moderation, with orders declining in October due to tough prior-year comparisons in North American air conditioning.
  • 7Appliance and Tools segment order growth remained modest, within the 0-5% range.

Frequently Asked Questions

The primary purpose of this 8-K filing is to provide investors with timely information about Emerson Electric's underlying order growth trends across its various business segments. This data serves as a leading indicator of potential future revenue and sales performance, allowing investors to assess the company's ongoing business momentum.

According to the filing, the Process Management and Industrial Automation segments demonstrated the strongest and most consistent order growth throughout the reported three-month periods. Growth in these areas was notably driven by specific businesses like valves and systems for Process Management, and power generating alternators and electronic drives for Industrial Automation.

The slowdown and subsequent decline in Climate Technologies' order growth, particularly in October, are primarily attributed to challenging year-over-year comparisons. The North American air-conditioning business experienced exceptionally strong order growth in the prior year period (over 50% in the first fiscal quarter of 2006), making current growth comparisons difficult.

For the three months ending in October 2006, favorable currency exchange rates contributed approximately 1 percentage point to the overall 5% order growth reported by Emerson Electric.