Business Context and Reporting Period
Company: Emerson Electric Co.
Filing Type: Form 8-K (Current Report)
Date of Report: August 1, 2006
Reporting Period: Third Quarter 2006 (ended June 30, 2006)
This filing announces the issuance of a press release regarding third-quarter results and provides Regulation FD disclosure on underlying order trends for the three months ended in June 2006.
Key Financial Metrics
The filing text does not provide specific GAAP revenue, profit, cash flow, margin, debt, or liquidity figures. These metrics are contained in the referenced press release (Exhibit 99.1) which is not included in the provided text.
Underlying Order Growth (Trailing 3-Month Average vs. Prior Year):
| Segment | April 2006 | May 2006 | June 2006 |
|---|---|---|---|
| Process Management | +10% | +15% | +15% to +20% |
| Industrial Automation | +5% to +10% | +10% to +15% | +10% to +15% |
| Network Power | >20% | >20% | >20% |
| Climate Technologies | +5% to +10% | +10% to +15% | >20% |
| Appliance and Tools | 0% to +5% | +5% to +10% | +5% to +10% |
| Total Emerson | +10% to +15% | +10% to +15% | +15% to +20% |
Material Changes and Drivers
- Order Acceleration: Order growth accelerated for the three months ended in June due to strong underlying business conditions.
- Currency Impact: Favorable currency exchange rates contributed approximately 2 percentage points to the order increase.
- Segment Drivers:
- Process Management: Driven by global energy markets and a weaker dollar; growth balanced across valves, measurement, and systems.
- Industrial Automation: Driven by favorable global capital spending; led by power generating alternator and electrical distribution businesses.
- Network Power: High growth driven by power systems, embedded power, and inbound power businesses.
- Climate Technologies: Strength in compressor business; transition to 13-SEER units and hot U.S. weather drove demand.
- Appliance and Tools: Strong growth in tools, storage, and disposers; HVAC motors showed solid growth.
Guidance, Outlook, and Risks
Management Commentary: Management indicated that underlying business conditions remained strong. The filing notes the use of non-GAAP financial measures in the accompanying press release, which should be considered supplemental to GAAP information.
Investor Events: Senior management held an investor conference call on August 1, 2006, to discuss third-quarter results. A replay was available for three months.
Risks and Contingencies: The filing text does not explicitly detail new risks or contingencies beyond standard references to currency fluctuations and market conditions.
Key Facts for Investor Verification
- Verify specific GAAP revenue, net income, and earnings per share figures in the full press release (Exhibit 99.1) as they are not listed in this 8-K text.
- Confirm the reconciliation of non-GAAP financial measures to GAAP results as referenced in the filing.
- Monitor the sustainability of the >20% order growth in Network Power and Climate Technologies segments.
- Assess the impact of the weaker dollar on future margins versus the current benefit to order growth.