Business Context and Reporting Period
Emerson Electric Co. filed this Form 8-K on July 29, 2003, pursuant to Regulation FD to disclose non-GAAP financial information regarding underlying orders. The report covers the trailing three-month period ending June 2003, with specific focus on June 2003 trends.
Key Financial Metrics
The filing provides percentage changes in underlying orders (excluding currency, acquisitions, and divestitures) compared to the prior year. It does not contain specific revenue, profit, cash flow, margin, debt, or liquidity figures.
| Segment | April 2003 | May 2003 | June 2003 |
|---|---|---|---|
| Process Control | +5% to +10% | +10% to +15% | +5% to +10% |
| Industrial Automation | +10% to +15% | +5% to +10% | +5% |
| Electronics and Telecom | -10% | -10% to -5% | -5% to 0% |
| HVAC | 0% to +5% | -5% to 0% | +5% |
| Appliance and Tools | -5% to 0% | -5% to 0% | -5% to 0% |
| Total Emerson | 0% to +5% | 0% to +5% | 0% to +5% |
Material Changes and Trends
- Currency Impact: Favorable currency exchange rates positively affected June orders by approximately 5 percent.
- Underlying Trends: Excluding currency effects, underlying trends were down slightly due to continued weakness in North America. However, the direction improved in June as underlying orders turned slightly positive.
- Segment Performance:
- Process Control: Worldwide strength in systems business offset by North American softness.
- Industrial Automation: Steady international demand offset by North American weakness.
- Electronics and Telecom: Continued impact from broad weakness in telecommunications markets.
- HVAC: Increases observed in Europe and Asia.
- Appliance and Tools: Softness in commercial storage and motors; mixed results in consumer-related businesses.
Outlook and Management Commentary
Management indicated a favorable shift in the direction of underlying orders in June. The filing announces upcoming investor communications:
- Webcast: CEO David N. Farr presented at the Banc of America Electrical Equipment & Multi-Industry Conference on July 31, 2003.
- Q3 Results: Third-quarter results are scheduled for release on August 5, 2003, followed by an investor conference call.
The filing does not provide specific forward-looking guidance on revenue or earnings, nor does it detail specific risks or contingencies beyond the noted market weaknesses.
Investor Verification Checklist
- Verify the specific Q3 2003 financial results when released on August 5, 2003, to confirm if the positive order trend translated to revenue growth.
- Monitor the "Electronics and Telecom" segment for continued weakness in the telecommunications market.
- Assess the sustainability of the "slightly positive" underlying order trend in North America versus international markets.
- Review the archived webcast from July 31, 2003, for detailed management commentary on the order book.