Summary
Emerson Electric Co. (EMR) released an 8-K filing on February 25, 2014, providing an update on its order growth trends for the three months ending January 2014. The company indicated modest overall order growth, with positive momentum observed across all segments. While global business investment showed a slight favorable trend, harsh January weather was noted as a factor expected to impact near-term sales and orders into February. Underlying growth, after excluding currency headwinds, approached the higher end of the 3-4% range previously reported, suggesting resilience despite mixed market conditions.
Key Highlights
- 1Overall Emerson orders showed modest growth (0 to +5%) for the trailing three months ending January 2014.
- 2Underlying orders growth (excluding currency) was trending towards the higher end of the 3-4% range, indicating underlying strength.
- 3Harsh January weather is expected to negatively impact sales and orders in the near term, extending into February.
- 4Process Management and Industrial Automation segments showed sequential improvement.
- 5Process Management orders benefited from strong energy and chemical industries, with robust demand in Latin America and Middle East/Africa.
- 6Industrial Automation orders improved, driven by electrical distribution and power generating alternators.
- 7Climate Technologies orders grew moderately, supported by strong refrigeration markets in Asia and Europe.
Frequently Asked Questions
For the trailing three-month period ending January 2014, Emerson Electric reported modest overall order growth ranging from 0% to +5% compared to the prior year. Excluding unfavorable currency translations of 2 percentage points, the underlying growth moved towards the high end of the 3% to 4% range.
All segments experienced growth. Process Management and Industrial Automation showed sequential improvement. Process Management benefited from strong energy and chemical markets, particularly in Latin America and the Middle East/Africa. Industrial Automation saw improvements in electrical distribution and power generation. Network Power orders were flat, Climate Technologies grew moderately driven by refrigeration, and Commercial & Residential Solutions saw improved trends due to strength in the U.S. residential market.
The company indicated that unusually harsh weather in January is expected to continue to hamper near-term growth of sales and orders into February. Additionally, currency translations presented a headwind, negatively impacting reported growth figures for segments like Network Power and Process Management.
Emerson acknowledges that statements in the report may be forward-looking and involve risks and uncertainties. These include economic and currency conditions, market demand, pricing, protection of intellectual property, and competitive and technological factors, as further detailed in their Annual Report on Form 10-K.