Business Context and Reporting Period
This Form 8-K filing by Emerson Electric Co. is dated January 22, 2013. The report provides Regulation FD disclosure regarding trailing three-month order trends for the period ending December 2012, comparing performance against the prior year.
Key Financial Metrics
The filing does not provide specific revenue, profit, cash flow, margin, debt, or liquidity figures. It focuses exclusively on percentage changes in new orders across business segments.
| Segment | Oct '12 | Nov '12 | Dec '12 |
|---|---|---|---|
| Process Management | +5 to +10% | 0 to +5% | 0 to +5% |
| Industrial Automation | -10 to -5% | -10 to -5% | -10 to -5% |
| Network Power | -10 to -5% | -5 to 0% | -5 to 0% |
| Climate Technologies | -5 to 0% | 0 to +5% | +5% |
| Commercial & Residential Solutions | 0 to +5% | +5% | +5 to +10% |
| Total Emerson | -5 to 0% | 0% | 0% |
Material Changes and Segment Commentary
- Overall Trend: Trailing three-month order trends remained slow overall but showed notable improvement in specific end markets. Currency translation had a negligible impact.
- Process Management: Orders grew modestly with mixed geographic trends. Robust oil and gas investment in Asia and Latin America offset softer orders in North America (due to difficult comparisons) and continued weakness in Europe.
- Industrial Automation: Orders declined at rates consistent with the prior month due to weak global capital goods markets. Weakness in power generating alternators and industrial motors was partially offset by improving trends in electrical drives.
- Network Power: Trends remained mixed. Excluding currency, the network power systems business grew for the first time in six months due to favorable telecommunications markets. This was offset by weaker conditions for embedded computing and power driven by mobile device demand volatility.
- Climate Technologies: Order trends improved significantly, led by robust growth in Asia (China, India, Southeast Asia) and strong U.S. air conditioning markets. Refrigeration end markets continued to contract.
- Commercial & Residential Solutions: Order trends remained solid with the highest pace of growth in nine months, driven by strong U.S. residential momentum in storage and food waste disposers businesses.
Guidance, Outlook, and Risks
Upcoming Events: Emerson is scheduled to report first quarter 2013 results on February 5, 2013, followed by a conference call. The company will also host its 2013 Investor Conference in Columbus, Ohio, on February 11-12, 2013.
Risks and Uncertainties: The filing includes standard forward-looking statement disclaimers. Risks include economic and currency conditions, market demand, pricing, intellectual property protection, and competitive and technological factors.
Investor Verification Checklist
- Verify the specific Q1 2013 financial results when reported on February 5, 2013.
- Monitor the divergence between improving Climate Technologies/Commercial & Residential orders and declining Industrial Automation orders.
- Assess the sustainability of the sequential improvement in Network Power systems business.
- Review the impact of currency translation on future reporting periods, as it was negligible in this specific trailing three-month window.