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Emerson Electric Co. (EMR - Free Report) reported third-quarter fiscal 2024 (ended Jun 30, 2024) adjusted earnings of $1.43 per share, which beat the Zacks Consensus Estimate of $1.42. The bottom line increased 11% year over year.
Emerson’s net sales of $4.38 billion missed the consensus estimate of $4.47 billion. The top line increased 11% year over year, driven by solid segmental performance. The underlying sales were up 3% year over year.
Segmental Details
Effective from the first quarter of fiscal 2023, the company started reporting under two segments, namely Intelligent Devices, and Software and Control Automation Solutions.
The Intelligent Devices segments’ net sales were $3 billion, up 1% year over year. Our estimate was $3.1 billion. The segment consists of four subgroups, namely Final Control, Measurement & Analytical, Discrete Automation and Safety & Productivity.
Final Control’s sales increased 1% year over year to $1 billion. Measurement & Analytical generated sales of $982 million, up 8% year over year. Discrete Automation’s sales totaled $618 million, reflecting a decline of 8% on a year-over-year basis. Safety & Productivity’s sales increased 3% year over year to $351 million.
The Software and Control Automation Solutions segment generated net sales of $1.4 billion, up 42% year over year. Our estimate was $1.4 billion. The segment consists of three subgroups, namely Control Systems & Software, AspenTech and Test & Measurement.
Control Systems & Software reported sales of $700 million, reflecting an increase of 6% year over year. AspenTech generated net sales of $343 million, up 7% year over year. Test & Measurement sales were $355 million.
Emerson Electric Co. Price, Consensus and EPS Surprise
The cost of sales increased 5.8% year over year to $2.1 billion. The pretax earnings margin was 10.4% compared with 20.8% in the year-ago period. Adjusted EBITA margin was 27.1% compared with 26.9% in the year-earlier quarter. Selling, general and administrative expenses increased 20.4% year over year to $1.3 billion.
Balance Sheet & Cash Flow
Exiting the fiscal third quarter, Emerson had cash and cash equivalents of $2.3 billion compared with $8.1 billion at the end of fiscal 2023 (ended September 2023). Long-term debt was $7.1 billion compared with $7.6 billion at the end of fiscal 2023. In the first nine months of fiscal 2024, the company made a payment of long-term debt worth $547 million.
In the same period, the company generated net cash of $2.2 billion from operating activities, up 75.6% year over year. Capital expenditure was $251 million, up from $194 million in the year-ago period. Emerson paid out dividends of $901 million in the same period.
FY24 Outlook Revised
Emerson updated its sales outlook for fiscal 2024. The company now anticipates net sales growth of approximately 15% from the year-earlier level compared with 15-16% expected before. Underlying sales are expected to rise approximately 6% compared with 5.5-6.5% anticipated earlier.
EMR projects earnings per share to be in the range of $2.82-$2.87 compared with $2.98-$3.08 expected earlier. Adjusted earnings per share are estimated to be in the range of $5.45–$5.50 compared with $5.40-$5.50 expected earlier. The company expects operating cash flow to be approximately $3.2 billion. Free cash flow is estimated to be about $2.8 billion.
Pentair plc (PNR - Free Report) reported second-quarter adjusted earnings per share of $1.22, which beat the Zacks Consensus Estimate of $1.15. The reported figure also improved 18% from the year-ago quarter.
Net sales rose 1.6% year over year to $1.1 billion. PNR’s top line outpaced the Zacks Consensus Estimate of $1.09 billion.
Crown Holdings, Inc. (CCK - Free Report) reported second-quarter adjusted earnings per share of $1.81, which beat the Zacks Consensus Estimate of $1.59. The bottom line improved 8% year over year.
Net sales totaled $3.04 billion, down 2.2% from the year-ago quarter. The top line missed the Zacks Consensus Estimate of $3.06 billion.
A. O. Smith Corporation’s (AOS - Free Report) second-quarter adjusted earnings of $1.06 per share missed the Zacks Consensus Estimate of $1.07. However, the bottom line increased 5% on a year-over-year basis.
Net sales of $1.02 billion surpassed the consensus estimate of $992 million. The top line increased 7% year over year, driven by strong demand for residential and commercial water heaters in North America.
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Emerson (EMR) Q3 Earnings Surpass Estimates, Sales Rise Y/Y
Emerson Electric Co. (EMR - Free Report) reported third-quarter fiscal 2024 (ended Jun 30, 2024) adjusted earnings of $1.43 per share, which beat the Zacks Consensus Estimate of $1.42. The bottom line increased 11% year over year.
Emerson’s net sales of $4.38 billion missed the consensus estimate of $4.47 billion. The top line increased 11% year over year, driven by solid segmental performance. The underlying sales were up 3% year over year.
Segmental Details
Effective from the first quarter of fiscal 2023, the company started reporting under two segments, namely Intelligent Devices, and Software and Control Automation Solutions.
The Intelligent Devices segments’ net sales were $3 billion, up 1% year over year. Our estimate was $3.1 billion. The segment consists of four subgroups, namely Final Control, Measurement & Analytical, Discrete Automation and Safety & Productivity.
Final Control’s sales increased 1% year over year to $1 billion. Measurement & Analytical generated sales of $982 million, up 8% year over year. Discrete Automation’s sales totaled $618 million, reflecting a decline of 8% on a year-over-year basis. Safety & Productivity’s sales increased 3% year over year to $351 million.
The Software and Control Automation Solutions segment generated net sales of $1.4 billion, up 42% year over year. Our estimate was $1.4 billion. The segment consists of three subgroups, namely Control Systems & Software, AspenTech and Test & Measurement.
Control Systems & Software reported sales of $700 million, reflecting an increase of 6% year over year. AspenTech generated net sales of $343 million, up 7% year over year. Test & Measurement sales were $355 million.
Emerson Electric Co. Price, Consensus and EPS Surprise
Emerson Electric Co. price-consensus-eps-surprise-chart | Emerson Electric Co. Quote
Margin Details
The cost of sales increased 5.8% year over year to $2.1 billion. The pretax earnings margin was 10.4% compared with 20.8% in the year-ago period. Adjusted EBITA margin was 27.1% compared with 26.9% in the year-earlier quarter. Selling, general and administrative expenses increased 20.4% year over year to $1.3 billion.
Balance Sheet & Cash Flow
Exiting the fiscal third quarter, Emerson had cash and cash equivalents of $2.3 billion compared with $8.1 billion at the end of fiscal 2023 (ended September 2023). Long-term debt was $7.1 billion compared with $7.6 billion at the end of fiscal 2023. In the first nine months of fiscal 2024, the company made a payment of long-term debt worth $547 million.
In the same period, the company generated net cash of $2.2 billion from operating activities, up 75.6% year over year. Capital expenditure was $251 million, up from $194 million in the year-ago period. Emerson paid out dividends of $901 million in the same period.
FY24 Outlook Revised
Emerson updated its sales outlook for fiscal 2024. The company now anticipates net sales growth of approximately 15% from the year-earlier level compared with 15-16% expected before. Underlying sales are expected to rise approximately 6% compared with 5.5-6.5% anticipated earlier.
EMR projects earnings per share to be in the range of $2.82-$2.87 compared with $2.98-$3.08 expected earlier. Adjusted earnings per share are estimated to be in the range of $5.45–$5.50 compared with $5.40-$5.50 expected earlier. The company expects operating cash flow to be approximately $3.2 billion. Free cash flow is estimated to be about $2.8 billion.
Zacks Rank
The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Industrial Companies
Pentair plc (PNR - Free Report) reported second-quarter adjusted earnings per share of $1.22, which beat the Zacks Consensus Estimate of $1.15. The reported figure also improved 18% from the year-ago quarter.
Net sales rose 1.6% year over year to $1.1 billion. PNR’s top line outpaced the Zacks Consensus Estimate of $1.09 billion.
Crown Holdings, Inc. (CCK - Free Report) reported second-quarter adjusted earnings per share of $1.81, which beat the Zacks Consensus Estimate of $1.59. The bottom line improved 8% year over year.
Net sales totaled $3.04 billion, down 2.2% from the year-ago quarter. The top line missed the Zacks Consensus Estimate of $3.06 billion.
A. O. Smith Corporation’s (AOS - Free Report) second-quarter adjusted earnings of $1.06 per share missed the Zacks Consensus Estimate of $1.07. However, the bottom line increased 5% on a year-over-year basis.
Net sales of $1.02 billion surpassed the consensus estimate of $992 million. The top line increased 7% year over year, driven by strong demand for residential and commercial water heaters in North America.