Summary
This 8-K filing from Emerson Electric Co. (EMR) on January 19, 2017, provides an update on the company's order trends for the three months ending December 2016. The key takeaway for investors is a sign of stabilization and potential improvement in order momentum. While total orders for the trailing three months were down 4%, underlying orders, excluding currency impacts, were flat. This is largely driven by an improving trend in the Automation Solutions segment, which saw positive growth in December for the first time in two years, indicating a potential turnaround in energy-related and industrial markets. The Commercial & Residential Solutions segment continues to exhibit solid growth, driven by favorable conditions in HVAC, refrigeration, and construction markets.
Key Highlights
- 1Trailing three-month orders showed a decrease of 4% for December 2016, but underlying orders (excluding currency) were flat, indicating stabilization.
- 2The Automation Solutions segment experienced an improving order trend, with December orders turning positive for the first time since December 2014, reflecting better conditions in energy and industrial markets.
- 3Commercial & Residential Solutions segment continued its positive performance with mid-single digit order growth, supported by strong HVAC, refrigeration, and U.S. construction markets.
- 4Currency translation had an unfavorable impact of 5% on Automation Solutions and 1% on Commercial & Residential Solutions orders.
- 5Underlying trailing-three-month orders for Automation Solutions improved to down mid-single digits.
- 6Emerson expressed cautious optimism about a turning point in order trends across all regions.
- 7Specific favorable markets mentioned include life sciences, power, and general industrial for Automation Solutions, and HVAC, refrigeration, and U.S. construction for Commercial & Residential Solutions.