Business Context and Reporting Period
Emerson Electric Co. filed a Form 8-K on March 27, 2007, pursuant to Regulation FD. The report provides a summary of GAAP underlying orders for the trailing three-month period ending February 2007, comparing performance against the prior year.
Key Financial Metrics
The filing focuses exclusively on order growth percentages rather than revenue, profit, or cash flow figures.
| Segment | Trailing 3-Month Order Growth (vs. Prior Year) |
|---|---|
| Process Management | +15% to +20% |
| Industrial Automation | +10% to +15% |
| Network Power | +5% to +10% |
| Climate Technologies | -5% to 0% |
| Appliance and Tools | 0% to +5% |
| Total Emerson | +5% to +10% |
Currency Impact: Favorable currency exchange rates contributed nearly 3 percentage points to the overall order increase.
Material Changes and Segment Performance
- Process Management: Orders remained strong, driven by robust capital spending in global energy markets and a strong global presence.
- Industrial Automation: High growth levels persisted, led by demand in European and Asian capital goods markets, specifically in power generating alternators and electronic drives. The weaker dollar benefited this segment.
- Network Power: Orders were flat. Weakness in North American telecom and embedded power businesses offset strength in uninterruptible power supply (UPS) and precision cooling.
- Climate Technologies: Trends improved slightly; order strength in Europe and Asia offset weakness in the United States.
- Appliance and Tools: Growth remained in the 0% to 5% range, with strong tools business performance offsetting softness in storage, motors, and appliance businesses.
Guidance, Outlook, and Events
The filing does not provide specific financial guidance or outlook for the full fiscal year. However, it announces an upcoming investor event:
- Date: Tuesday, May 1, 2007.
- Event: Issuance of second quarter 2007 results and an investor conference call.
- Time: 2:00 p.m. Eastern Daylight Time (1:00 p.m. Central Daylight Time).
Investor Verification Checklist
- Verify the specific revenue and earnings figures for the second quarter 2007 when released on May 1, 2007.
- Confirm the extent to which currency fluctuations impacted reported results versus organic growth.
- Monitor the performance of the Network Power segment, specifically the offset between telecom weakness and UPS strength.
- Review the upcoming Q2 2007 conference call for updated guidance on the Climate Technologies and Appliance segments.