Business Context and Reporting Period
Company: Emerson Electric Co.
Filing Type: Form 8-K (Current Report)
Date of Report: November 3, 2009
Reporting Period: Fourth Quarter and Fiscal Year 2009 results. The filing references a press release (Exhibit 99.1) containing detailed financial results and non-GAAP measures.
Key Financial Metrics
The filing text does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. These figures are contained within the referenced press release (Exhibit 99.1) which is not included in the provided text.
Order Trends (Trailing 3-Month Average vs. Prior Year):
- Total Emerson: Down 20% to 15% (September 2009).
- Process Management: Down 10% to 15% (September 2009).
- Industrial Automation: Down greater than 30% (July–September 2009).
- Network Power: Down 15% to 10% (September 2009).
- Climate Technologies: Down 5% to 0% (September 2009).
- Appliance and Tools: Down 25% to 20% (September 2009).
Material Changes and Segment Performance
Currency Impact: Currency exchange rates positively impacted total orders by approximately 3 percentage points and Process Management orders by approximately 9 percentage points.
Segment Highlights:
- Process Management: Underlying order rates (excluding currency) remained at similar levels across July, August, and September. End-market demand remains mixed.
- Industrial Automation: Order rates remained very weak but stabilized at low levels.
- Network Power: Growth in China (driven by infrastructure and renewable energy) was offset by broad weakness in other regions.
- Climate Technologies: Order rates improved, driven by continued strength in China.
- Appliance and Tools: Continued negative impact from challenging U.S. residential, non-residential, and consumer end-market conditions.
Outlook, Risks, and Management Commentary
Management Commentary: The trailing three-month underlying order rate trend lines for September have flattened out for Process Management and shown modest improvement across the rest of the business segments compared to August.
Risks and Uncertainties: Forward-looking statements are subject to risks including economic and currency conditions, market demand, pricing, and competitive and technological factors.
Investor Events:
- Conference call held on November 3, 2009, at 3:00 p.m. EST.
- Baird 2009 Industrial Conference presentation scheduled for November 11, 2009, in Chicago.
Investor Verification Checklist
- Verify specific Q4 and FY2009 revenue, net income, and EPS figures in the attached Exhibit 99.1 press release.
- Confirm the reconciliation of non-GAAP financial measures to GAAP results as required by Regulation G.
- Assess the sustainability of the "flattening" order trends in Process Management and Climate Technologies.
- Monitor the impact of U.S. residential market conditions on the Appliance and Tools segment.
- Review the specific currency hedging strategies given the significant positive impact of exchange rates on order growth.