What is the primary reason for Emerson's increased restructuring expenses?

Emerson is increasing restructuring expenses to approximately $275-$300 million for fiscal year 2009 due to continued weakness in global end-market demand reflected in declining order trends (down over 20%). These actions are intended to aggressively implement cost repositioning programs and ensure the company is well-positioned for a projected global economic recovery in late 2010.

Which business segments are experiencing the most significant order declines?

The Industrial Automation segment is described as remaining extremely weak, significantly impacted by depressed nonresidential gross fixed investment and deteriorating power generation demand. While other segments like Process Management and the company as a whole are also down significantly, Industrial Automation shows the most pronounced weakness in the reported period.

Are there any signs of improvement or stabilization within Emerson's businesses?

Yes, the report notes that underlying order trends for May were slightly better than April, though still negative. Specifically, the Climate Technologies segment is showing sequential improvement and appears to be stabilizing, aided by seasonal U.S. air-conditioning demand. Similarly, consumer-related businesses within the Appliance and Tools segment are also showing signs of stabilizing at low end-market demand levels.

When will Emerson provide its next financial results update?

Emerson is scheduled to issue its third quarter 2009 results and hold an investor conference call on Tuesday, August 4, 2009, beginning at 2:00 p.m. Eastern Daylight Time.

EMR 8-K: Regulation FD — Jun 18, 2009

Summary

Emerson Electric Co. (EMR) filed an 8-K on June 18, 2009, providing an update on its "Underlying Orders" for the trailing three-month period ending May 2009. The report indicates a continued significant decline in orders across most segments, with total company orders down 25% compared to the prior year. Currency exchange rates had a negative impact of approximately 3 percentage points. While underlying order trends showed a slight improvement from April to May, they still reflect ongoing weakness in global end-market demand. In response to these challenging conditions, Emerson announced increased global cost reduction initiatives, expecting to incur restructuring expenses of $275 million to $300 million for the fiscal year to reposition the company for a projected global economic recovery in late 2010. The report also provided segment-specific order commentary, noting particular weakness in Industrial Automation and mixed results in Process Management, though Climate Technologies and Appliance and Tools showed signs of stabilization at low demand levels. The company also announced its Q3 2009 earnings release date and conference call for August 4, 2009.

Key Highlights

1Trailing three-month GAAP orders for Emerson were down 25% year-over-year as of May 2009, indicating persistent global demand weakness.
2Currency exchange rates negatively impacted reported orders by approximately 3 percentage points in the trailing three-month period.
3Emerson is increasing global cost reduction actions and expects to incur $275-$300 million in restructuring expenses for fiscal year 2009.
4Industrial Automation orders remain extremely weak due to depressed nonresidential gross fixed investment and deteriorating power generation demand.
5Process Management orders are down 15-20%, with mixed end-market performance (power/water strong, chemical/refining weak).
6Climate Technologies and Appliance and Tools segments show signs of stabilizing at low demand levels, with some seasonal improvement noted in U.S. air-conditioning.
7The company will announce its third quarter 2009 results and host an investor call on August 4, 2009.

EMERSON ELECTRIC CO 8-K Report, Regulation FD Disclosure (Jun 18, 2009)

Summary

Key Highlights

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