Summary
This 8-K filing from Emerson Electric Co. (EMR) on March 21, 2012, provides an update on the company's orders for the trailing three months ending February 2012. The report indicates modest overall order growth for Emerson, driven by strength in its Process Management and Commercial & Residential Solutions segments. While Industrial Automation showed stable demand and Network Power experienced a return to growth, the Climate Technologies segment continued to see order declines, albeit at a slower pace. The company highlighted that currency exchange rates negatively impacted reported order growth by 1 percentage point. Importantly, Emerson noted a strong backlog growth of 10-15% year-over-year, which supports a positive sales outlook for the second half of fiscal year 2012. Investors should note the differing performance across segments, with Process Management benefiting from high energy prices and Commercial & Residential Solutions showing robust demand in key end markets.
Key Highlights
- 1Emerson reported modest overall order growth of 0-5% for the trailing three months ending February 2012, showing acceleration from the previous month.
- 2The Process Management segment displayed robust order trends, up 10% in February 2012, driven by strong global oil and gas investment.
- 3Commercial & Residential Solutions continued strong order growth (+5% to +10% in February 2012), supported by U.S. residential renovation and commercial construction markets.
- 4Network Power orders returned to positive year-over-year growth for the first time since September 2011.
- 5Climate Technologies orders continued to decline but at a slower pace, with a -10% to -15% range in February 2012.
- 6Currency exchange rates negatively impacted order growth by 1 percentage point.
- 7A strong backlog growth of 10-15% year-over-year supports a positive sales outlook for the second half of fiscal year 2012.