Summary
This 8-K filing from Emerson Electric Co. (EMR) provides an update on the company's 3-month orders growth through January 2016. The data indicates continued order declines across most segments, primarily attributed to the impact of low oil prices, reduced industrial capital spending, and the strength of the U.S. dollar, which negatively affected currency translation. While total orders were down 9% in the trailing three months ending January 2016 (with underlying orders down 6%), the company highlighted modest underlying order growth in Climate Technologies, Network Power, and Commercial & Residential Solutions segments for January. Despite the current headwinds, Emerson reiterated its expectation that overall underlying trailing three-month orders will turn positive by April 2016. The filing also serves as an announcement for an upcoming investor presentation by CEO David Farr at the Barclays Industrial Conference on February 18, 2016. Investors should note that the company has transitioned to quarterly order data releases but may provide ad-hoc updates like this one.
Key Highlights
- 1Trailing three-month orders decreased by 9% in January 2016 compared to the prior year.
- 2Currency translation had a negative impact, deducting 3 percentage points from the order growth in January.
- 3Underlying orders (excluding currency and M&A) were down 6% for the trailing three months ending January 2016.
- 4Process Management and Industrial Automation segments continued to show significant order declines (-15% to -20%).
- 5Climate Technologies and Network Power segments showed signs of improvement, with orders moving towards flat or slight growth in January.
- 6Commercial & Residential Solutions also saw slight to modest underlying trailing three-month orders growth.
- 7Emerson expects underlying trailing three-month orders to turn positive in April 2016.