What was the primary reason for the slower-than-expected order growth?

The slower-than-expected order growth, particularly in the Automation Solutions segment, was primarily due to softer global discrete end markets, persistent high channel inventories, and a less robust recovery in North American upstream oil and gas activity than management had anticipated.

What is Emerson doing to address the current market conditions and position for future profitability?

Emerson is increasing planned restructuring activities for the remainder of 2019, with full-year spending on these actions expected to be around $100 million. These investments are aimed at improving company profitability in early 2020.

When will investors get more detailed financial results and future outlook?

Emerson is scheduled to report its third quarter 2019 results and provide an outlook update prior to market open on Tuesday, August 6, 2019. A conference call will follow at 2:00 p.m. Eastern Time.

How did currency fluctuations impact reported orders?

Unfavorable currency translation had a negative impact. For Total Emerson, it reduced underlying orders growth by 2%. For Automation Solutions, it was a 2% unfavorable impact, and for Commercial & Residential Solutions, it was a 1% unfavorable impact.

EMR 8-K: Earnings & Results & Regulation FD

Summary

This 8-K filing from Emerson Electric Co. (EMR) on July 29, 2019, provides an update on its financial performance, primarily focusing on order trends for the trailing three months ending June 2019 and commentary on its third quarter 2019 earnings. Total Emerson orders were flat, with underlying orders up 2%, falling short of the previously communicated expectation of 5-7% growth. This slowdown was attributed to weaker performance in Automation Solutions, impacted by softer global discrete end markets, high channel inventories, and delayed recovery in North American upstream oil and gas. Commercial & Residential Solutions also saw a slight decline in underlying orders, affected by unfavorable weather and channel inventory re-balancing. Despite these order challenges, the company highlighted strong operating execution which mitigated the profit impact of slower sales, and indicated plans to increase restructuring activities to position for improved profitability in early 2020. Investors are directed to an upcoming earnings call on August 6, 2019, for further details on third quarter results and outlook. The company also announced an increase in planned full-year restructuring spend to approximately $100 million.

Key Highlights

1Total Emerson trailing three-month orders were flat, with underlying orders up 2%, below the previously guided 5-7% range.
2Automation Solutions underlying orders grew 4% (excluding currency), but slowed from previous periods due to softer discrete end markets and persistent high channel inventories.
3Commercial & Residential Solutions underlying orders declined 1% (excluding currency), impacted by adverse weather and channel inventory adjustments.
4Despite slower sales growth, strong operating execution and lower corporate costs helped earnings per share slightly exceed guidance.
5Emerson is increasing planned restructuring activities for the remainder of 2019, with full-year spend expected to reach approximately $100 million, up $30 million.
6The company will provide further details on third quarter results and an outlook update on August 6, 2019.
7Underlying orders exclude the impact of currency translation.

EMERSON ELECTRIC CO 8-K Report, Financial Results (Jul 29, 2019)

Summary

Key Highlights

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