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Emerson (EMR) to Report Q2 Earnings: What's in the Cards?
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Emerson Electric Co. (EMR - Free Report) is set to release second-quarter fiscal 2022 (ended March 2022) results on May 4, before market open.
The company’s earnings beat estimates in each of the last four quarters, the surprise being 6.7%, on average. In the last reported quarter, Emerson’s earnings of $1.05 per share beat the Zacks Consensus Estimate of 99 cents by 6.1%.
Image Source: Zacks Investment Research
In the past six months, the company’s shares have lost 5.4% compared with the industry’s decline of 16.7%.
Factors at Play
Strength across Emerson’s life sciences, chemical, power, industrial and residential end markets is likely to have boosted its performance in second-quarter fiscal 2022. Also, improvements in the energy end market, coupled with the company’s robust backlog level in Automation Solutions and Commercial & Residential Solutions segments, are likely to have been tailwinds in the to-be-reported quarter.
Acquisitions made by Emerson were accretive to its sales in first-quarter fiscal 2022 (ended December 2021), a trend which is likely to have continued in the to-be-reported quarter as well, given the strength across its acquired businesses. The company acquired Mita-Teknik in December 2021, which expanded its presence in the renewable energy market. Also, in the first quarter of fiscal 2021 (ended December 2020), it acquired Open Systems International and Progea Group. While the Open Systems acquisition has enhanced its offerings under the Automation Solutions segment, the Progea buyout has strengthened its offerings within the control and embedded software space.
The company's investments in product innovation and digital initiatives, along with its focus on operational execution and cost-control measures, are likely to have supported its fiscal second-quarter performance.
Despite strength in end markets, escalating cost of sales and operating expenses have been a concern for Emerson. In first-quarter fiscal 2022, its cost of sales increased 8.7% year over year, while selling and administrative expenses jumped 1.3%. High raw material costs and restructuring expenses, along with supply-chain challenges and logistic issues, are expected to have adversely impacted its margin and profitability in the to-be-reported quarter.
Given its extensive regional presence, Emerson’s operations are subject to global economic, political risks and forex woes. A stronger U.S. dollar might have hurt the company's overseas business in the fiscal second quarter.
The Zacks Consensus Estimate for Automation Solutions’ revenues for the fiscal second quarter is currently pegged at $2,925 million, indicating a 4.3% increase from the quarter-ago reported number. The consensus estimate for revenues from the Commercial and Residential Solutions segment is pegged at $1,783 million, indicating a sequential increase of 6.7%.
The Zacks Consensus Estimate for the company’s fiscal second-quarter total revenues is currently pegged at $4,711 million, suggesting 5.3% growth from the quarter-ago reported number. The consensus estimate for earnings of $1.18 suggests an improvement of 12.4% sequentially.
Earnings Whispers
According to our quantitative model, a stock needs to have the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or at least 3 (Hold) to increase the odds of an earnings beat. But that is not the case here, as we will see below.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Emerson has an Earnings ESP of -0.70%, as the Most Accurate Estimate is pegged at $1.17, lower than the Zacks Consensus Estimate of $1.18.
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
CECO Environmental Corp. has an Earnings ESP of +9.09% and a Zacks Rank of 3 at present. CECE delivered an earnings surprise of 11.1% in the last reported quarter.
Earnings estimates of CECE have decreased 25.8% for 2022 in the past 60 days. Its shares have lost 35.7% in the past six months.
Eaton Corporation plc (ETN - Free Report) has an Earnings ESP of +0.85% and a Zacks Rank of 3, currently. ETN delivered a trailing four-quarter earnings surprise of 7%, on average.
Earnings estimates of Eaton have decreased 0.8% for 2022 in the past 60 days. Its shares have declined 14.5% in the past six months.
AGCO Corporation (AGCO - Free Report) has an Earnings ESP of +0.93% and a Zacks Rank of 3, currently. Its earnings surprise in the last four quarters was 56.7%, on average.
In the past 60 days, AGCO’s earnings estimates have decreased 0.7% for 2022. The stock has rallied 4.5% in the past six months.
Image: Bigstock
Emerson (EMR) to Report Q2 Earnings: What's in the Cards?
Emerson Electric Co. (EMR - Free Report) is set to release second-quarter fiscal 2022 (ended March 2022) results on May 4, before market open.
The company’s earnings beat estimates in each of the last four quarters, the surprise being 6.7%, on average. In the last reported quarter, Emerson’s earnings of $1.05 per share beat the Zacks Consensus Estimate of 99 cents by 6.1%.
Image Source: Zacks Investment Research
In the past six months, the company’s shares have lost 5.4% compared with the industry’s decline of 16.7%.
Factors at Play
Strength across Emerson’s life sciences, chemical, power, industrial and residential end markets is likely to have boosted its performance in second-quarter fiscal 2022. Also, improvements in the energy end market, coupled with the company’s robust backlog level in Automation Solutions and Commercial & Residential Solutions segments, are likely to have been tailwinds in the to-be-reported quarter.
Acquisitions made by Emerson were accretive to its sales in first-quarter fiscal 2022 (ended December 2021), a trend which is likely to have continued in the to-be-reported quarter as well, given the strength across its acquired businesses. The company acquired Mita-Teknik in December 2021, which expanded its presence in the renewable energy market. Also, in the first quarter of fiscal 2021 (ended December 2020), it acquired Open Systems International and Progea Group. While the Open Systems acquisition has enhanced its offerings under the Automation Solutions segment, the Progea buyout has strengthened its offerings within the control and embedded software space.
The company's investments in product innovation and digital initiatives, along with its focus on operational execution and cost-control measures, are likely to have supported its fiscal second-quarter performance.
Despite strength in end markets, escalating cost of sales and operating expenses have been a concern for Emerson. In first-quarter fiscal 2022, its cost of sales increased 8.7% year over year, while selling and administrative expenses jumped 1.3%. High raw material costs and restructuring expenses, along with supply-chain challenges and logistic issues, are expected to have adversely impacted its margin and profitability in the to-be-reported quarter.
Given its extensive regional presence, Emerson’s operations are subject to global economic, political risks and forex woes. A stronger U.S. dollar might have hurt the company's overseas business in the fiscal second quarter.
The Zacks Consensus Estimate for Automation Solutions’ revenues for the fiscal second quarter is currently pegged at $2,925 million, indicating a 4.3% increase from the quarter-ago reported number. The consensus estimate for revenues from the Commercial and Residential Solutions segment is pegged at $1,783 million, indicating a sequential increase of 6.7%.
The Zacks Consensus Estimate for the company’s fiscal second-quarter total revenues is currently pegged at $4,711 million, suggesting 5.3% growth from the quarter-ago reported number. The consensus estimate for earnings of $1.18 suggests an improvement of 12.4% sequentially.
Earnings Whispers
According to our quantitative model, a stock needs to have the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or at least 3 (Hold) to increase the odds of an earnings beat. But that is not the case here, as we will see below.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Emerson has an Earnings ESP of -0.70%, as the Most Accurate Estimate is pegged at $1.17, lower than the Zacks Consensus Estimate of $1.18.
Emerson Electric Co. Price and EPS Surprise
Emerson Electric Co. price-eps-surprise | Emerson Electric Co. Quote
Zacks Rank: The company carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Key Picks
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
CECO Environmental Corp. has an Earnings ESP of +9.09% and a Zacks Rank of 3 at present. CECE delivered an earnings surprise of 11.1% in the last reported quarter.
Earnings estimates of CECE have decreased 25.8% for 2022 in the past 60 days. Its shares have lost 35.7% in the past six months.
Eaton Corporation plc (ETN - Free Report) has an Earnings ESP of +0.85% and a Zacks Rank of 3, currently. ETN delivered a trailing four-quarter earnings surprise of 7%, on average.
Earnings estimates of Eaton have decreased 0.8% for 2022 in the past 60 days. Its shares have declined 14.5% in the past six months.
AGCO Corporation (AGCO - Free Report) has an Earnings ESP of +0.93% and a Zacks Rank of 3, currently. Its earnings surprise in the last four quarters was 56.7%, on average.
In the past 60 days, AGCO’s earnings estimates have decreased 0.7% for 2022. The stock has rallied 4.5% in the past six months.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.