Summary
Emerson Electric Co. (EMR) filed an 8-K on January 27, 2020, providing an update on its trailing three-month orders for December 2019, which showed a slight increase overall. The Automation Solutions segment experienced a modest pickup, driven by the booking of previously delayed Liquefied Natural Gas (LNG) projects and positive performance in several key end markets, though North American upstream oil and gas and global discrete markets remained weak. The Commercial & Residential Solutions segment saw a slight decline in orders, primarily due to softness in North American HVAC markets and inventory reductions in distribution channels for cold chain and professional tools. Despite mixed segment performance, the company indicated expectations for better orders growth in Commercial & Residential Solutions as fiscal 2020 progresses. Key takeaways for investors include the positive signal from LNG project bookings within Automation Solutions, suggesting potential for future greenfield investment. However, persistent weakness in certain oil & gas and discrete manufacturing sectors, alongside global trade uncertainties impacting metals and mining, warrants attention. Investors should note upcoming reporting events, including the Q1 2020 earnings call on February 4, 2020, and the annual investor conference on February 13, 2020, which will provide further insights into the company's performance and outlook.
Key Highlights
- 1Total Emerson trailing three-month orders were up slightly, with underlying orders up 1%, excluding a 1% unfavorable currency impact.
- 2Automation Solutions orders increased, driven by the booking of delayed Liquefied Natural Gas (LNG) projects and positive trends in key end markets, although North American upstream oil & gas and global discrete markets showed weakness.
- 3Commercial & Residential Solutions orders saw a slight decline, with softness in North American HVAC and inventory adjustments impacting cold chain and professional tools markets.
- 4Positive indications for greenfield business investment in LNG were noted.
- 5Global underlying orders growth rates for key end markets were provided, showing strength in Life Sciences and Chemical & Petrochemical, but weakness in Metals & Mining and Upstream Oil & Gas.
- 6Emerson will report its first quarter 2020 results on February 4, 2020, followed by an annual investor conference on February 13, 2020.