Summary
Emerson Electric Co. (EMR) filed an 8-K on September 25, 2012, providing an update on its 3-month trailing average orders for August 2012. The report indicates a continued challenging global economic environment impacting order growth, with overall orders for Emerson declining slightly compared to the prior year. This trend is attributed to weak global economic conditions and a strong U.S. dollar, which negatively impacted currency translation. Key segments like Process Management showed continued strength, particularly in North America, Asia, and Latin America, driven by project activity in oil and gas, chemical, and power. However, Industrial Automation, Network Power, and Climate Technologies experienced declines or remained flat. Commercial & Residential Solutions also saw a slowdown. Management anticipates that underlying sales growth in the fourth quarter will be slower than in the third quarter, projecting full-year underlying sales growth of approximately 2.5%. Investors should note that these trends suggest a cautious outlook for near-term performance, with a reliance on U.S. economic catalysts for improved investment and demand.
Key Highlights
- 1Overall Emerson trailing 3-month orders (August 2012) declined by -5% to 0% year-over-year, reflecting broader economic headwinds.
- 2Process Management remains a strong performer, with positive order growth driven by North America, Asia, and Latin America end markets.
- 3Industrial Automation, Network Power, and Climate Technologies segments are facing headwinds, with declining or flat order trends.
- 4The U.S. dollar's strength is noted as a significant factor, negatively impacting reported order growth through currency translation.
- 5Underlying sales growth for the fourth quarter is expected to be slower than the third quarter, with full-year underlying sales growth projected at approximately 2.5%.
- 6Emerson will report its fourth quarter and fiscal year 2012 results and host an investor conference call on November 6, 2012.