Summary
This 8-K filing from Emerson Electric Co. (EMR) provides an update on its trailing three-month order growth as of June 2012, highlighting a 3% decline attributed primarily to U.S. dollar appreciation and a slowing global economy. Excluding currency impacts, underlying orders remained flat, with positive contributions from Process Management and Climate Technologies offset by weakness in Industrial Automation and Network Power. Management noted significant headwinds from the European financial crisis, U.S. fiscal uncertainty, and a slowdown in China, leading to customer caution and reduced investment. The company anticipates continued currency headwinds, particularly a strengthening U.S. dollar against the Euro, which could impact fourth-quarter sales. Despite these challenges, Emerson expects solid backlog conversion to drive underlying sales growth in the third quarter. The filing also announces the upcoming release of third-quarter 2012 results on August 7, 2012, along with a conference call for investors.
Key Highlights
- 1Trailing three-month orders declined 3% in June 2012, with underlying orders holding steady when excluding currency impacts.
- 2U.S. dollar appreciation and a slowing global economy are identified as primary reasons for order decline.
- 3Process Management orders showed strong growth, driven by continued investment in oil, gas, chemical, and power industries.
- 4Industrial Automation and Network Power segments experienced order declines, largely due to weakness in Europe and challenging end-market conditions.
- 5Climate Technologies order trends improved, showing the best underlying performance since May 2011, benefiting from U.S. air conditioning demand.
- 6Emerson expects the U.S. dollar to strengthen against the Euro in the near term, potentially reducing fourth-quarter sales.
- 7The company will report its third-quarter 2012 results on August 7, 2012.