Summary
This 8-K filing from Emerson Electric Co. (EMR) on August 25, 2015, provides an update on the company's orders growth for the three months ending July 2015. The report indicates a challenging environment, with total Emerson orders decreasing double digits, primarily driven by the sharp drop in oil prices, a global slowdown in capital spending, and a strong U.S. dollar impacting currency translation. Key business segments like Process Management and Industrial Automation are significantly affected by the oil price decline and reduced capital expenditure. While Commercial & Residential Solutions saw slight growth, this was not enough to offset the broader downturn. Investors should note the consistent double-digit decline in underlying orders over the past several months, suggesting persistent market headwinds. The company also highlighted an upcoming investor presentation on September 17, 2015.
Key Highlights
- 1Total Emerson orders declined double digits for the three months ending July 2015, reflecting challenging global economic conditions.
- 2The oil price slump and a general slowdown in global capital spending are key drivers of the negative order trends, particularly impacting Process Management and Industrial Automation segments.
- 3Currency translation had a negative impact of 6 percentage points on orders growth in July 2015.
- 4Underlying orders (excluding currency and M&A) have consistently decreased by 8-10% over the preceding four months, indicating ongoing market weakness.
- 5Process Management and Industrial Automation segments experienced significant order declines (14% and 12% underlying, respectively) due to oil prices and industrial spending weakness.
- 6Commercial & Residential Solutions was a bright spot, showing slight underlying order growth, though not enough to offset overall declines.
- 7Emerson plans to present at the Morgan Stanley Laguna Conference on September 17, 2015, with materials available on their investor website.