Summary
This 8-K filing from Emerson Electric Co. (EMR) on October 16, 2015, provides an update on the company's orders growth for the three months ending September 2015. The report indicates a significant decline in orders across most segments, with total Emerson orders down 16% year-over-year for the trailing three-month period. This weakness is attributed to several macroeconomic factors, including persistently low oil prices, a global slowdown in industrial capital spending, reduced demand in China, and the strength of the U.S. dollar, which negatively impacted reported figures through currency translation. Key segments experiencing order declines include Process Management and Industrial Automation, heavily influenced by the downturn in the oil and gas sector and general industrial spending. Network Power and Climate Technologies also saw decreases, with the latter impacted by challenging year-over-year comparisons. Commercial & Residential Solutions experienced a moderate decrease. The company also announced a transition from monthly to quarterly reporting of orders data, with the next release scheduled for December.
Key Highlights
- 1Total Emerson orders declined 16% for the trailing three months ending September 2015, with underlying orders down 11%.
- 2Weakness in orders is attributed to low oil prices, global industrial spending slowdown, China's demand, and U.S. dollar strength (currency translation deducted 5 percentage points).
- 3Process Management and Industrial Automation orders were significantly impacted by reduced capital and operational spending in the oil and gas sector and general industrial weakness.
- 4Network Power and Climate Technologies segments also experienced order declines, with foreign currency translation a notable factor.
- 5Commercial & Residential Solutions saw a moderate decrease in orders, impacted by specific product lines.
- 6Emerson Electric will transition its orders reporting from monthly to quarterly, with the next update in December 2015.
- 7The company acknowledges risks and uncertainties related to its strategic portfolio repositioning, economic conditions, and currency fluctuations in its forward-looking statements.