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Emerson (EMR) to Report Q1 Earnings: Is a Beat in Store?
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Emerson Electric Co. (EMR - Free Report) is likely to witness top and bottom-line growth when it reports first-quarter fiscal 2024 (ended Dec 31, 2023) results on Feb 7, before market open. The Zacks Consensus Estimate for revenues is pegged at $3.9 billion, indicating growth of 15.4% from the prior-year quarter’s reported figure.
The consensus mark for earnings is pinned at $1.04 per share, which has remained stable in the past 60 days. The figure indicates a jump of 33.3% from that reported in the prior-year quarter. The company’s bottom line missed the Zacks Consensus Estimate by 0.8% in the last reported quarter. However, it has a trailing four-quarter average earnings surprise of 4.7%.
Image Source: Zacks Investment Research
In the past three months, EMR’s shares have risen 2.4% compared with the industry’s growth of 14.5%.
Let’s see how things might have shaped up for Emerson prior to the announcement.
Key Factors and Q1 Estimates
Strength across Emerson’s measurement and analytical and final control businesses, supported by stable demand in the process and hybrid end markets, is likely to have supplemented the top-line performance of its Intelligent Devices segment in the fiscal first quarter.
Underlying sales growth in the Americas and Europe regions is expected to have boosted the performance of the Intelligent Devices unit. However, softness in the discrete and semiconductor markets might be a drag on the unit’s performance. We expect the segment’s revenues to increase 2.9% to $2.6 billion from the year-ago fiscal quarter.
Solid momentum in the control systems and software business, along with the AspenTech buyout, is likely to have driven the revenues of the Software and Control segment. The company’s acquisition of National Instruments (October 2023), which has expanded its presence into high-growth end markets, including semiconductor and electronics, transportation and electric vehicles, is likely to have augmented the top line of the segment.
Improved supply chains, easier availability of electronic components and solid backlogs are also likely to have acted as tailwinds for the unit. For the fiscal first quarter, we expect the Software and Control segment’s revenues to increase 51.1% to $1.3 billion from the year-ago reported number.
Given the strength across its end markets, Emerson has provided a bullish forecast for the quarter under review. The company expects net sales to increase 14-17.5% year over year in the first quarter of fiscal 2024. Underlying sales are expected to increase 6.5-8.5%.
However, escalating operating costs and expenses are likely to have impacted EMR’s margin performance in the fiscal first quarter. Also, given the company’s substantial international operations, foreign currency headwinds are expected to have marred EMR’s margins and profitability.
Our proven model suggests an earnings beat for EMR this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here, as elaborated below.
Earnings ESP: EMR has an Earnings ESP of +0.41%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: EMR carries a Zacks Rank of 3 at present.
Other Stocks With the Favorable Combination
Here are three other companies that you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this reporting cycle.
The company is slated to release fourth-quarter results on Feb 22. ALRM delivered a trailing four-quarter earnings surprise of 35%, on average. The stock has risen 19.6% in the past three months.
Atmus Filtration Technologies Inc. (ATMU - Free Report) has an Earnings ESP of +3.12% and a Zacks Rank #3 at present. The company is slated to release fourth-quarter results on Feb 14. ATMU delivered a trailing four-quarter earnings surprise of 23.4%, on average. The stock has rallied 15.1% in the past three months.
Ingersoll Rand (IR - Free Report) has an Earnings ESP of +0.98% and a Zacks Rank #3 at present. The company is slated to release fourth-quarter results on Feb 15. IR delivered a trailing four-quarter earnings surprise of 16.1%, on average. The stock has risen 28.3% in the past three months.
Image: Bigstock
Emerson (EMR) to Report Q1 Earnings: Is a Beat in Store?
Emerson Electric Co. (EMR - Free Report) is likely to witness top and bottom-line growth when it reports first-quarter fiscal 2024 (ended Dec 31, 2023) results on Feb 7, before market open. The Zacks Consensus Estimate for revenues is pegged at $3.9 billion, indicating growth of 15.4% from the prior-year quarter’s reported figure.
The consensus mark for earnings is pinned at $1.04 per share, which has remained stable in the past 60 days. The figure indicates a jump of 33.3% from that reported in the prior-year quarter. The company’s bottom line missed the Zacks Consensus Estimate by 0.8% in the last reported quarter. However, it has a trailing four-quarter average earnings surprise of 4.7%.
Image Source: Zacks Investment Research
In the past three months, EMR’s shares have risen 2.4% compared with the industry’s growth of 14.5%.
Let’s see how things might have shaped up for Emerson prior to the announcement.
Key Factors and Q1 Estimates
Strength across Emerson’s measurement and analytical and final control businesses, supported by stable demand in the process and hybrid end markets, is likely to have supplemented the top-line performance of its Intelligent Devices segment in the fiscal first quarter.
Underlying sales growth in the Americas and Europe regions is expected to have boosted the performance of the Intelligent Devices unit. However, softness in the discrete and semiconductor markets might be a drag on the unit’s performance. We expect the segment’s revenues to increase 2.9% to $2.6 billion from the year-ago fiscal quarter.
Solid momentum in the control systems and software business, along with the AspenTech buyout, is likely to have driven the revenues of the Software and Control segment. The company’s acquisition of National Instruments (October 2023), which has expanded its presence into high-growth end markets, including semiconductor and electronics, transportation and electric vehicles, is likely to have augmented the top line of the segment.
Improved supply chains, easier availability of electronic components and solid backlogs are also likely to have acted as tailwinds for the unit. For the fiscal first quarter, we expect the Software and Control segment’s revenues to increase 51.1% to $1.3 billion from the year-ago reported number.
Given the strength across its end markets, Emerson has provided a bullish forecast for the quarter under review. The company expects net sales to increase 14-17.5% year over year in the first quarter of fiscal 2024. Underlying sales are expected to increase 6.5-8.5%.
However, escalating operating costs and expenses are likely to have impacted EMR’s margin performance in the fiscal first quarter. Also, given the company’s substantial international operations, foreign currency headwinds are expected to have marred EMR’s margins and profitability.
Emerson Electric Co. Price and EPS Surprise
Emerson Electric Co. price-eps-surprise | Emerson Electric Co. Quote
Earnings Whispers
Our proven model suggests an earnings beat for EMR this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here, as elaborated below.
Earnings ESP: EMR has an Earnings ESP of +0.41%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: EMR carries a Zacks Rank of 3 at present.
Other Stocks With the Favorable Combination
Here are three other companies that you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this reporting cycle.
Alarm.com Holdings (ALRM - Free Report) has an Earnings ESP of +8.79% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is slated to release fourth-quarter results on Feb 22. ALRM delivered a trailing four-quarter earnings surprise of 35%, on average. The stock has risen 19.6% in the past three months.
Atmus Filtration Technologies Inc. (ATMU - Free Report) has an Earnings ESP of +3.12% and a Zacks Rank #3 at present. The company is slated to release fourth-quarter results on Feb 14. ATMU delivered a trailing four-quarter earnings surprise of 23.4%, on average. The stock has rallied 15.1% in the past three months.
Ingersoll Rand (IR - Free Report) has an Earnings ESP of +0.98% and a Zacks Rank #3 at present. The company is slated to release fourth-quarter results on Feb 15. IR delivered a trailing four-quarter earnings surprise of 16.1%, on average. The stock has risen 28.3% in the past three months.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.