Business Context and Reporting Period
This Form 8-K filing by Emerson Electric Co. is dated September 19, 2008. The report provides Regulation FD disclosure regarding the company's GAAP underlying orders for the trailing three-month period ended August 2008, comparing performance to the prior year.
Key Financial Metrics
The filing focuses on order growth trends rather than revenue, profit, or cash flow figures. The following table summarizes the percent change in trailing 3-month average orders versus the prior year:
| Segment | June 2008 | July 2008 | August 2008 |
|---|---|---|---|
| Process Management | +15% | +15% to +20% | +10% to +15% |
| Industrial Automation | +20% | +15% to +20% | +10% to +15% |
| Network Power | +5% to +10% | 0% to +5% | 0% to +5% |
| Climate Technologies | +5% to +10% | +10% to +15% | +10% to +15% |
| Appliance and Tools | -5% to 0% | -5% to 0% | -5% to 0% |
| Total Emerson | +10% to +15% | +10% | +5% to +10% |
The filing text does not provide clear values for revenue, profit, cash flow, margins, debt, or liquidity.
Material Changes and Segment Commentary
- Currency Impact: Currency exchange rates contributed approximately 2 percentage points to total order growth for the three months ended in August. This contribution was lower than in recent periods due to a strengthening U.S. dollar.
- Process Management: Orders remained at high levels driven by strong global project activity, though the currency contribution was lower than in previous months.
- Industrial Automation: Growth was led by the power generating alternator and materials joining businesses, with favorable currency translation.
- Network Power: Positive trends were driven by geographic diversity. Strength in power systems was offset by softness in telecommunication end markets and tougher comparisons to strong 2007 growth.
- Climate Technologies: Orders benefited from a heat pump market recovery in Europe and warm North American weather in July, partially offset by cooler August weather in North America.
- Appliance and Tools: Trends were consistent with the prior month, with strength in professional tools and non-residential storage offset by weakness in motors, residential storage, and appliance businesses.
Guidance, Outlook, and Upcoming Events
The filing does not contain specific financial guidance or management commentary on future earnings. It outlines the following upcoming investor events:
- November 4, 2008: Issuance of fourth quarter and fiscal year 2008 results. An investor conference call will be held at 2:00 p.m. EST.
- November 12, 2008: Presentation at the Baird 2008 Industrial Conference in Chicago, Illinois, by David N. Farr, Chairman, CEO, and President.
Key Facts for Investor Verification
- Verify the impact of the strengthening U.S. dollar on future order growth trends, as the currency contribution has decreased.
- Monitor the "Appliance and Tools" segment, which is the only division reporting negative to flat order growth.
- Confirm the timing of project bookings in Process Management and Network Power, as fluctuations in timing can impact reported trends.
- Review the upcoming Q4 and full-year 2008 results scheduled for November 4, 2008, for actual revenue and profit figures.