Summary
This 8-K filing from Emerson Electric Co. (EMR) dated December 21, 2015, provides an update on its orders growth for the three months ending November 2015, and initial guidance for the first and second quarters of fiscal year 2016. The company experienced a 13% decrease in trailing three-month orders, primarily driven by low oil prices, reduced industrial capital spending, weakness in emerging markets, and a strong U.S. dollar. Despite the overall challenging environment, the filing highlights some segment-specific nuances. While Process Management and Industrial Automation faced significant headwinds, Network Power, Climate Technologies, and Commercial & Residential Solutions showed positive underlying orders growth in November. Emerson reiterated its sales guidance for the first quarter, expecting reported sales to be down approximately 17% and reported EPS around $0.50. The company also announced upcoming investor events in February 2016, including its first-quarter earnings release and annual investor conference.
Key Highlights
- 1Trailing three-month orders decreased by 13% for November 2015, impacted by macro-economic factors and currency fluctuations.
- 2Underlying orders were down 10%, reflecting broad market weakness but consistent with the trend over the prior eight months.
- 3Network Power, Climate Technologies, and Commercial & Residential Solutions segments demonstrated positive underlying orders growth in November.
- 4Process Management and Industrial Automation segments continue to be negatively affected by low oil prices and reduced industrial spending, respectively.
- 5Emerson expects first-quarter fiscal year 2016 reported sales to decrease by approximately 17% and reported EPS to be around $0.50.
- 6Guidance for second-quarter fiscal year 2016 underlying sales anticipates a decrease of approximately 5-6% year-over-year.
- 7Upcoming investor events include the first-quarter 2016 earnings call on February 2, 2016, and an annual investor conference on February 10-11, 2016.