Business Context and Reporting Period
Company: Emerson Electric Co.
Filing Type: Form 8-K (Current Report)
Date of Report: May 6, 2003
Reporting Period: Fiscal 2003 Second Quarter (ended March 31, 2003)
This filing serves as a Regulation FD disclosure and includes a press release (Exhibit 99.1) announcing fiscal 2003 second-quarter earnings. The report details underlying order trends and segment performance for the quarter.
Key Financial Metrics and Order Trends
The filing provides specific data on Underlying Orders (excluding currency, acquisitions, and divestitures) as a trailing 3-month average versus the prior year. Specific revenue, profit, cash flow, or debt figures are not contained within the text of this 8-K summary; they are referenced in the attached press release.
| Segment | Jan '03 | Feb '03 | Mar '03 |
|---|---|---|---|
| Process Control | +5% | 0 to +5% | +5 to +10% |
| Industrial Automation | +5 to +10% | +10 to +15% | +10 to +15% |
| Electronics and Telecom | Flat | -5 to 0% | -10 to -5% |
| HVAC | >+20% | +10 to +15% | 0 to +5% |
| Appliance and Tools | 0 to +5% | 0 to +5% | -5 to 0% |
| Total Emerson | +5 to +10% | 0 to +5% | 0 to +5% |
Material Changes and Segment Commentary
- Currency Impact: Favorable currency exchange rates positively affected March orders by approximately 2% to 4% overall, and by 6% to 8% in Process Control and Industrial Automation segments.
- Underlying Trends: Excluding currency and M&A, underlying trends were down slightly due to weakness in North America and Europe, attributed to the war and lower capital spending levels.
- Process Control: Negatively affected by weaker short-cycle orders, maintenance/repair orders, and cautious project investment, particularly in North America.
- Industrial Automation: Reflected stability in industrial goods markets.
- Electronics and Telecom: Continued weakening due to cautious computer and telecommunications markets.
- HVAC: Benefited from a solid North American market and order strength in Asia.
- Appliance and Tools: Weakened due to softness in industrial and consumer markets.
Guidance, Risks, and Unusual Items
Non-GAAP Measures: The filing notes that the attached press release contains non-GAAP financial measures. Reconciliations to GAAP measures are provided in the press release. The company states these measures are supplemental and not a substitute for GAAP information.
Risks and Contingencies:
- Geopolitical Impact: The war is cited as a factor contributing to lower capital spending and market weakness in North America and Europe.
- Market Conditions: Cautious investment in projects and softness in consumer/industrial markets are identified as headwinds.
Guidance: The text of this 8-K does not provide specific forward-looking financial guidance or earnings outlook numbers.
Investor Verification Checklist
- Verify the specific revenue, net income, and earnings per share figures in the attached Exhibit 99.1 (Press Release), as they are not detailed in this 8-K text.
- Review the reconciliation of non-GAAP financial measures to GAAP measures provided in the press release to understand the impact of adjustments.
- Assess the sustainability of the HVAC segment's performance given the noted shift from >+20% growth in January to 0 to +5% in March.
- Monitor the impact of the war and capital spending levels on the Process Control and Electronics segments in subsequent quarters.