Business Context and Reporting Period
Emerson Electric Co. filed this Form 8-K on December 12, 2019, pursuant to Regulation FD to disclose three-month order data for the period ending November 2019. The company operates through two primary segments: Automation Solutions and Commercial & Residential Solutions.
Key Financial Metrics
This filing provides order data rather than financial statement metrics such as revenue, profit, or cash flow. The filing text does not provide clear values for revenue, margins, debt, or liquidity.
Order Performance (Trailing Three-Month Averages)
| Segment | Sept '19 | Oct '19 | Nov '19 |
|---|---|---|---|
| Automation Solutions | 0 to 5% | 0% | 0% |
| Commercial & Residential Solutions | -5 to 0% | -5 to 0% | -5 to 0% |
| Total Emerson | 0% | -5 to 0% | -5 to 0% |
November 2019 Specifics:
- Total Emerson: Trailing three-month orders were down 1%. Underlying orders were up 1%, excluding a 2% unfavorable currency impact. Excluding two prior-year fleetwide modernization projects, underlying orders were up 2%.
- Automation Solutions: Orders were flat. Underlying orders were up 1% (excluding 1% unfavorable currency) or up 3% (excluding prior-year projects).
- Commercial & Residential Solutions: Orders were down 2%. Underlying orders were flat, excluding 2% unfavorable currency.
Material Changes and Commentary
Management highlighted several regional and sector-specific trends:
- Headwinds: Large North America projects faced delays due to trade tensions and geopolitical uncertainty. North America air conditioning markets softened, and professional tools end markets remained soft.
- Strengths: Long-cycle businesses showed steady growth. The Systems business grew over 10% (excluding prior-year projects). Global cold chain markets improved. Europe remained strong, driven by residential heat pump demand. Asia, Middle East & Africa remained strong with underlying orders up more than 10%, supported by infrastructure investment. China underlying orders were up 5%.
Guidance, Outlook, and Risks
The filing does not contain updated financial guidance or specific outlook figures. It references standard forward-looking risks including economic and currency conditions, market demand, pricing, intellectual property protection, cybersecurity, tariffs, and competitive factors.
Upcoming Events
- February 4, 2020: First quarter 2020 results report and investor conference call.
- February 13, 2020: Annual investor conference at the New York Stock Exchange.
Investor Verification Checklist
- Verify the impact of the two prior-year fleetwide modernization projects on year-over-year comparisons.
- Monitor the resolution of trade tensions and geopolitical uncertainty affecting large North America projects.
- Track the performance of the Systems business and long-cycle segments versus the softening professional tools and North America air conditioning markets.
- Review the upcoming Q1 2020 earnings release on February 4, 2020, for updated revenue and margin data.