Summary
Emerson Electric Co. (EMR) filed an 8-K on December 19, 2008, providing an update on its order trends for the three months ending November 2008, and announcing upcoming investor events. The report indicates a softening order environment, with total Emerson orders down 10-15% in November 2008 on a trailing three-month average basis compared to the prior year. This decline was primarily attributed to the strengthening U.S. dollar and weakening underlying orders, exacerbated by customer facility shutdowns and inventory reduction programs. While currency headwinds negatively impacted orders significantly, the report also notes that the weakening of the U.S. dollar after the reporting period could provide a future tailwind. The company anticipates underlying orders, excluding currency, to continue in the -5% to -10% range. Key business segments like Process Management, Industrial Automation, and Network Power all experienced order declines, with specific segment drivers highlighted. Investors should note the company's upcoming investor conference call on February 3, 2009, to discuss Q1 2009 results and an Annual Investment Community Update on February 6, 2009.
Key Highlights
- 1Total Emerson orders showed a negative trend, down 10-15% for the trailing three-month period ending November 2008, compared to the prior year.
- 2The decline in orders was significantly impacted by a stronger U.S. dollar, which negatively affected order rates by approximately 12 percentage points in the trailing three months.
- 3Underlying orders, excluding currency impacts, trended slightly negative due to customer facility shutdowns and inventory reduction programs.
- 4Emerson anticipates that underlying orders, excluding currency, will continue to be in the -5% to -10% range in the near term.
- 5Specific segments like Process Management, Industrial Automation, Network Power, Climate Technologies, and Appliance and Tools all experienced order softness, with varied contributing factors.
- 6The company announced its first quarter 2009 earnings release and conference call for February 3, 2009.
- 7Emerson also scheduled its Annual Investment Community Update for February 6, 2009, in New York City.