Summary
Emerson Electric Co. (EMR) filed an 8-K on August 26, 2008, providing a 3-month summary of GAAP underlying orders as of July 2008. The report indicates overall order growth remained robust at 10% for the trailing three months, driven significantly by favorable currency exchange rates due to a weaker dollar, contributing approximately 4 percentage points to the increase. This positive trend was observed across several key segments, although some areas showed moderating growth or weakness. The report highlights particular strength in the Process Management segment, benefiting from high demand in energy-related markets, and continued robust performance in Industrial Automation, also aided by the weaker dollar. Climate Technologies saw an improvement, attributed to favorable weather conditions and market recovery in Europe. However, the Appliance and Tools segment continues to be negatively impacted by a weak U.S. residential investment and consumer spending environment, leading to flat or slightly negative order growth in that area.
Key Highlights
- 1Total Emerson order growth was 10% for the three months ended July 2008.
- 2Favorable currency exchange rates from a weaker U.S. dollar contributed approximately 4 percentage points to the order growth.
- 3Process Management orders showed strong growth (+15% for July) driven by energy sector demand and technological leadership.
- 4Industrial Automation orders also remained strong (+15% to +20% for July), benefiting from the power generating alternator business and currency tailwinds.
- 5Network Power order growth moderated in July, cycling into tougher year-over-year comparisons and impacted by weakness in financial and telecommunications sectors, despite strength in China.
- 6Climate Technologies orders improved (+10% to +15% for July) due to hot weather and European market recovery.
- 7Appliance and Tools segment orders remained weak (-5% to 0% for July), negatively impacted by U.S. residential investment and consumer spending.