How much did currency fluctuations affect Emerson's order growth?

Currency translation had a significant impact, deducting approximately 7 percentage points from the reported trailing three-month orders growth.

What is Emerson's outlook for the third quarter?

Emerson expects third quarter underlying sales to be slightly negative compared to the prior year, excluding currency impacts of approximately 6% and divestiture impacts of approximately 2%. Reported sales for the third quarter are anticipated to decrease by up to approximately 10%.

Which business segments are experiencing the most significant order weakness?

While weakness is noted across most segments, Process Management and Industrial Automation orders are particularly affected by lower oil prices and continued industrial spending softness, respectively. Network Power also saw decreases due to weak global demand for data center infrastructure and telecommunications investment.

EMR 8-K: Regulation FD — May 20, 2015

Q: What is the primary reason for the decline in Emerson's orders?

The primary reasons cited for the decline in orders are the drop in oil prices affecting energy-related markets, a global slowdown in capital spending, and the strength of the U.S. dollar, which negatively impacts reported international sales.

Summary

Emerson Electric Co. (EMR) filed an 8-K on May 20, 2015, primarily to provide an update on its orders growth for the trailing three months ending April 2015. The report indicates a significant slowdown, with total Emerson orders down 15% year-over-year for the trailing three months. This decline is attributed to lower oil prices impacting energy-related markets, a global slowdown in capital spending, and a strong U.S. dollar, which negatively impacted results by 7 percentage points through currency translation. Underlying orders, excluding currency and divestitures, were down high single digits, reflecting broad market weakness across all segments. The company expects this trend to continue into the third quarter, forecasting underlying sales to be slightly negative compared to the prior year, with reported sales potentially decreasing by up to approximately 10%. While specific segment details show varying degrees of weakness, Process Management and Industrial Automation appear most affected by oil price declines and industrial spending softness, respectively. The filing also announces upcoming investor presentations, providing further opportunities for management to discuss these trends.

Key Highlights

1Total Emerson orders declined 15% year-over-year for the trailing three months ending April 2015.
2Currency translation had a significant negative impact, reducing reported orders by 7 percentage points.
3Underlying orders, excluding currency and divestitures, were down high single digits, signaling broad market weakness.
4Lower oil prices and a global slowdown in capital spending are key drivers of the order decline, particularly in energy-related markets.
5The company anticipates continued weakness into the third quarter, with expected slight negative underlying sales growth.
6Reported sales for the third quarter are projected to decrease by up to approximately 10%.
7Emerson's Chairman and CEO, David Farr, is scheduled to present at multiple investor conferences in late May and early June 2015.

EMERSON ELECTRIC CO 8-K Report, Regulation FD Disclosure (May 20, 2015)

Summary

Key Highlights

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