Summary
Emerson Electric Co. (EMR) filed an 8-K on March 17, 2011, providing an update on its underlying order trends for the trailing three months ending February 2011. The report indicates solid overall order growth for Emerson, driven primarily by strength in the Process Management and Industrial Automation segments, which are benefiting from increased capital spending in global capital goods end markets. While the overall trend is positive, the company notes a moderation in order growth rates from their peak levels, suggesting a normalization as prior-year comparisons become more challenging. The report also highlights specific segment performance. Process Management and Industrial Automation continue to exhibit strong double-digit growth. Network Power experienced a decline, attributed to difficult year-over-year comparisons in Asia and earlier-cycle businesses. Climate Technologies saw moderated growth due to tough comparisons, and Tools and Storage showed slight improvement. Investors should note the impact of currency exchange rates, which had a positive impact on orders. The filing also announces upcoming investor events, including a second-quarter earnings call and a presentation at the Electrical Products Group Conference.
Key Highlights
- 1Emerson reported solid overall order growth of 10-15% for the trailing three months ending February 2011, indicating continued strength in demand.
- 2The Process Management and Industrial Automation segments were key growth drivers, both showing over 20% order growth, fueled by increased capital spending in capital goods end markets.
- 3The company noted a moderation in order growth rates from their peak, with expectations for further normalization as tougher prior-year comparisons approach.
- 4Network Power orders experienced a decline due to challenging year-over-year comparisons, particularly in Asia and certain earlier-cycle businesses.
- 5Climate Technologies order growth moderated due to difficult prior-year comparisons, though strength was seen in North America and Asia.
- 6Currency exchange rates had a positive impact on orders, contributing approximately 2% to the overall growth.
- 7Emerson announced its Q2 2011 earnings call for May 3, 2011, and a presentation at the Electrical Products Group Conference on May 18, 2011.