8-KRegulation FD

EMERSON ELECTRIC CO 8-K Report, Regulation FD Disclosure (Feb 24, 2010)

Filed February 24, 2010For Securities:EMR

Summary

Emerson Electric Co. (EMR) filed an 8-K on February 24, 2010, providing an update on its underlying orders for the three months ending January 2010. The report indicates a positive trend in order growth, with total underlying orders for Emerson turning flat to up 5 percent in January 2010, a significant improvement from the previous months. Currency fluctuations had a positive impact of over 5 percentage points on total orders during this period. Key business segments like Climate Technologies, Network Power, and Appliance and Tools are showing positive order trends, even when excluding currency impacts. While Process Management continues to experience declines, the rate of decline is moderating. Industrial Automation shows sequential improvement, with January orders turning positive. Overall, the filing suggests a bottoming out of order declines and a nascent recovery, particularly driven by international markets and specific product categories. Investors should note the increasing contribution of currency to reported order growth.

Key Highlights

  • 1Total Emerson underlying orders turned flat to up 5% in January 2010, improving from prior months.
  • 2Currency exchange rates positively impacted total orders by over 5 percentage points in January 2010.
  • 3Climate Technologies, Network Power, and Appliance and Tools segments showed positive underlying order trends excluding currency.
  • 4Industrial Automation orders improved sequentially, turning positive in January 2010.
  • 5Process Management order declines are moderating, especially in the MRO portion.
  • 6Network Power strength observed in embedded power, embedded computing, and Asia.
  • 7Climate Technologies benefited from Asia and air-conditioning/refrigeration markets, offset by European weakness.

Frequently Asked Questions

The filing indicates a positive turnaround in Emerson's order trends. Total underlying orders for the trailing three-month period ending January 2010 were flat to up 5 percent, showing a significant improvement and suggesting that order declines may be bottoming out.

Currency exchange rates are having a notable positive impact on reported order growth. For the trailing three months ending January 2010, currency positively impacted total Emerson orders by over 5 percentage points. This is an important factor for investors to consider when evaluating the underlying organic performance of the business segments.

Climate Technologies, Network Power, and Appliance and Tools segments are showing positive underlying order trends even after excluding the impact of currency. Industrial Automation also demonstrated sequential improvement and turned positive in January. While Process Management is still down, the rate of decline is moderating.

Yes, the filing highlights strength in Asia for both Network Power and Climate Technologies. For Network Power, embedded power and embedded computing businesses are also strong. For Climate Technologies, air-conditioning and refrigeration end markets are growing, though this is partially offset by weakness in Europe.