Business Context and Reporting Period
This Form 8-K filing by Emerson Electric Co. (EMR) was submitted on June 17, 2019, pursuant to Regulation FD. The report discloses three-month trailing order data for the period ending May 2019, providing a snapshot of business trends prior to the upcoming Q3 2019 earnings release.
Key Financial Metrics
The filing focuses on order trends rather than GAAP financial results. Key metrics include:
- Total Emerson Orders: Trailing three-month orders increased 1% year-over-year.
- Underlying Orders: Excluding currency impacts, underlying orders rose 4%.
- Currency Impact: A 3% unfavorable impact due to the stronger U.S. dollar.
- Automation Solutions: Orders increased 3% (underlying up 6%); currency impact was 3% unfavorable.
- Commercial & Residential Solutions: Orders decreased 2% (underlying flat); currency impact was 2% unfavorable.
The filing does not provide specific values for revenue, profit, cash flow, margins, debt, or liquidity.
Material Changes and Segment Performance
Performance varied significantly by segment and geography:
- Automation Solutions: Growth was driven by long-cycle businesses (Final Control and Systems up 10% and 7%, respectively).
- Europe: Underlying orders up over 10% due to strong MRO activity and project conversions.
- Asia, Middle East & Africa: Underlying orders up high-single digits.
- Americas: Underlying orders up low-single digits; stable trends offset by a slowdown in upstream oil and gas and soft discrete manufacturing demand due to high channel inventory.
- Commercial & Residential Solutions:
- Asia Climate Technologies: Orders remained negative due to trade tensions and inventory re-balancing.
- North America: Solid air conditioning demand drove low-single-digit growth when excluding Asia.
- Europe: Underlying orders up low-single digits.
- Global Professional Tools: Down low-single digits due to channel inventory re-balancing.
Outlook, Risks, and Management Commentary
Management Commentary:
- Oil and gas spending is expected to improve modestly through the remainder of the fiscal year.
- Discrete manufacturing demand is expected to improve after channel inventory re-balances over the next couple of months.
- Asia Climate Technologies performance was below expectations due to trade tensions.
Upcoming Events:
- Q3 2019 results will be reported on Tuesday, August 6, 2019, prior to market open.
- Investor conference call scheduled for 2:00 p.m. Eastern Time on August 6, 2019.
Risks and Contingencies:
- Forward-looking statements are subject to risks including economic and currency conditions, market demand, pricing, intellectual property protection, cybersecurity, tariffs, and competitive factors.
- Trade tensions continue to dampen demand in specific regions.
Investor Verification Checklist
- Verify the Q3 2019 earnings release on August 6, 2019, for actual revenue and profit figures.
- Monitor the pace of channel inventory re-balancing in discrete manufacturing and Asia Climate Technologies.
- Track the impact of the stronger U.S. dollar on future reported order growth.
- Assess the trajectory of upstream oil and gas spending as a driver for Automation Solutions in the Americas.
- Review the upcoming 10-Q filing for detailed financial statements and liquidity metrics not present in this 8-K.