Summary
Emerson Electric Co. (EMR) reported its 3-month trailing orders for October, November, and December 2014, which showed a slight decrease in overall orders by December, primarily attributed to currency translation headwinds, particularly the strength of the U.S. dollar. The company anticipates this currency impact will affect full-year GAAP reported sales by 4 to 5 percentage points. Despite the overall slowdown in December, underlying orders, excluding currency effects, showed moderate growth, driven by the Process Management and Commercial & Residential Solutions segments. Management highlighted a global economic transition characterized by lower oil prices and a stronger U.S. dollar, with particular weakness noted in Europe. Investors should note the mixed demand across geographies and markets. While the U.S. market showed strength, especially in Commercial & Residential Solutions, European markets exhibited continued weakness. The company provided specific divisional commentary, with Process Management and Industrial Automation facing currency pressures but showing underlying resilience or flatness. Network Power saw slight underlying growth in data centers, while Climate Technologies experienced a slowdown as expected due to inventory adjustments. Emerson also announced upcoming investor events, including its Q1 2015 earnings release and conference call on February 3, 2015, and its annual investor conference on February 19, 2015, which investors should monitor for further strategic insights and financial performance updates.
Key Highlights
- 1December 2014 trailing three-month orders saw a slight decrease (0 to -5%) compared to the prior year, mainly due to a 5 percentage point impact from U.S. dollar translation.
- 2Underlying orders (excluding currency) grew moderately, led by Process Management and Commercial & Residential Solutions, indicating some underlying business strength.
- 3The strong U.S. dollar is expected to reduce full-year GAAP reported sales by 4 to 5 percentage points.
- 4Process Management orders showed solid underlying growth, particularly in Europe and North America, despite significant currency translation headwinds.
- 5Climate Technologies orders growth slowed as anticipated, linked to the completion of inventory build-up related to U.S. residential air conditioning regulations.
- 6Emerson will report its first quarter 2015 results and host a conference call on February 3, 2015.
- 7The company will hold its annual investor conference in New York on February 19, 2015.