What is the main driver behind the recent decline in Emerson's orders?

The primary drivers for the decline in Emerson's orders are the prevailing low oil prices and a general reduction in industrial capital spending. These factors have significantly impacted segments like Process Management and Industrial Automation.

When does Emerson expect its order trends to improve?

Emerson's management expects that its underlying trailing three-month orders will turn positive starting in April 2016. This outlook is based on sequential improvements observed in most business segments during February.

What are the expected financial results for the second quarter of 2016?

For the second quarter of 2016, Emerson expects reported sales to decrease by approximately 9% to 10% year-over-year. Adjusted earnings per share are anticipated to be in the range of $0.60 to $0.65, excluding around $60 million ($0.09 per share) in separation costs related to portfolio repositioning.

How are different business segments performing in terms of orders?

Network Power and Climate Technologies are experiencing order growth, driven by demand for data center infrastructure and U.S. air conditioning, respectively. Process Management orders are showing stabilization despite ongoing impacts from low oil prices, while Industrial Automation orders continue to reflect weakness. Commercial & Residential Solutions saw a slight order decrease.

EMR 8-K: Regulation FD — Mar 16, 2016

Summary

Emerson Electric Co. (EMR) filed an 8-K on March 16, 2016, providing an update on its orders and business outlook. The report highlights a continued decline in trailing three-month orders, which decreased by 6% in February 2016 compared to the prior year, largely influenced by low oil prices and reduced industrial capital spending. Despite the overall decline, the company anticipates underlying orders to turn positive in April. Management expects second-quarter sales to decline approximately 9-10% on a reported basis, with adjusted earnings per share projected between $0.60 and $0.65, excluding significant separation costs. The report also details segment performance. Process Management orders, while down, showed stabilization, supported by downstream power investments and chemical/petrochemical spending. Industrial Automation experienced weakness due to industrial spending and oil/gas markets, while Network Power saw growth driven by data center and telecommunications investments. Climate Technologies also increased orders, particularly in U.S. air conditioning. Commercial & Residential Solutions experienced a slight decrease. Emerson reiterated its expectation for a positive turn in underlying orders soon, indicating confidence in a future rebound.

Key Highlights

1Trailing three-month orders decreased by 6% in February 2016, primarily due to low oil prices and reduced industrial capital spending.
2Emerson anticipates that underlying orders will turn positive in April 2016.
3Expected second-quarter reported sales are down approximately 9-10% year-over-year.
4Second-quarter adjusted earnings per share are projected to be between $0.60 and $0.65, excluding approximately $0.09 per share in separation costs.
5Process Management and Industrial Automation segments continue to face headwinds, while Network Power and Climate Technologies showed order growth.
6Currency translation had a negative impact on reported sales and orders across several segments.
7The company is undergoing strategic portfolio repositioning actions, which introduce additional risks and uncertainties.

EMERSON ELECTRIC CO 8-K Report, Regulation FD Disclosure (Mar 16, 2016)

Summary

Key Highlights

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