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Emerson (EMR) Q3 Earnings & Revenues Beat Estimates, Down Y/Y
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Emerson Electric Co.’s (EMR - Free Report) third-quarter fiscal 2020 (ended Jun 30, 2020) adjusted earnings of 80 cents per share beat the Zacks Consensus Estimate of 61 cents. On a year-over-year basis, the bottom line declined 14.9% from 94 cents.
Inside the Headlines
Emerson’s revenues were $3,914 million in the quarter, reflecting a decline of 16% from the year-ago quarter. Underlying sales were down 15% on account of the decline in demand owing to the coronavirus outbreak. Forex woes had a 1% adverse impact on sales, while acquired assets had no impact.
Notably, the top line beat the Zacks Consensus Estimate of $3,853 million.
The company reports net sales under two segments — Automation Solutions, and Commercial & Residential Solutions. Fiscal third-quarter segmental results are briefly discussed below:
Automation Solutions’ revenues were $2,589 million, decreasing 14.4% year over year. Underlying sales declined 13%, while forex woes adversely impacted sales by 1%. Acquired assets had no impact on sales.
Commercial & Residential Solutions generated revenues of $1,327 million in the fiscal third quarter, down 20.1% year over year. Underlying sales were down 19%, while forex woes adversely impacted sales by 1%. Acquired assets had no impact on sales. Under the segment, Climate Technologies’ sales declined 19.1% year over year to $970 million, while that from Tools & Home Products decreased 22.9% to $357 million.
Emerson Electric Co. Price, Consensus and EPS Surprise
In the quarter under review, Emerson's cost of sales decreased 14.4% year over year to $2,296 million. It represented 58.7% of net revenues compared with 57.3% in the year-ago quarter. Gross margin was at 41.3%, down 140 basis points on a year-over-year basis. Selling, general and administrative (SG&A) expenses declined 17.1% year over year to $934 million. As a percentage of sales, SG&A expenses were 23.9% compared with 24% in the year-ago quarter.
Balance Sheet and Cash Flow
Exiting the fiscal third quarter, Emerson had cash and cash equivalents of $2,450 million, up from $1,603 million at the end of the year-ago quarter. Long-term debt balance increased 26.8% year over year to $5,500 million. During the first nine months of fiscal 2020, the company repaid debts of $502 million.
In the first nine months of fiscal 2020, it generated net cash of $1,854 million from operating activities, reflecting an increase of 2.9% from the year-ago comparable period. Capital expenditure was $329 million, down from $395 million in the year-ago comparable period.
During the first nine months of fiscal 2020, the company paid out dividends amounting to $910 million and repurchased shares worth $942 million.
Outlook
For fiscal 2020 (ending September 2020), it anticipates net sales decline of 9-10%. Underlying sales are expected to fall 7.5-9%.
Adjusted earnings per share are predicted to be $3.20-$3.35 for fiscal 2020.
Emerson expects Automation Solutions’ net sales to decline 8-10%, while Commercial & Residential Solutions’ net sales are projected to decline 9-11%.
Notably, the company anticipates continued challenging but gradually improving demand environment in the fiscal fourth quarter and in the quarters ahead.
Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #3 (Hold).
AGCO delivered an earnings surprise of 409.54%, on average, in the trailing four quarters.
Avery Dennison delivered an earnings surprise of 7.70%, on average, in the trailing four quarters.
Berry Global delivered an earnings surprise of 16.34%, on average, in the trailing four quarters.
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A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
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Emerson (EMR) Q3 Earnings & Revenues Beat Estimates, Down Y/Y
Emerson Electric Co.’s (EMR - Free Report) third-quarter fiscal 2020 (ended Jun 30, 2020) adjusted earnings of 80 cents per share beat the Zacks Consensus Estimate of 61 cents. On a year-over-year basis, the bottom line declined 14.9% from 94 cents.
Inside the Headlines
Emerson’s revenues were $3,914 million in the quarter, reflecting a decline of 16% from the year-ago quarter. Underlying sales were down 15% on account of the decline in demand owing to the coronavirus outbreak. Forex woes had a 1% adverse impact on sales, while acquired assets had no impact.
Notably, the top line beat the Zacks Consensus Estimate of $3,853 million.
The company reports net sales under two segments — Automation Solutions, and Commercial & Residential Solutions. Fiscal third-quarter segmental results are briefly discussed below:
Automation Solutions’ revenues were $2,589 million, decreasing 14.4% year over year. Underlying sales declined 13%, while forex woes adversely impacted sales by 1%. Acquired assets had no impact on sales.
Commercial & Residential Solutions generated revenues of $1,327 million in the fiscal third quarter, down 20.1% year over year. Underlying sales were down 19%, while forex woes adversely impacted sales by 1%. Acquired assets had no impact on sales. Under the segment, Climate Technologies’ sales declined 19.1% year over year to $970 million, while that from Tools & Home Products decreased 22.9% to $357 million.
Emerson Electric Co. Price, Consensus and EPS Surprise
Emerson Electric Co. price-consensus-eps-surprise-chart | Emerson Electric Co. Quote
Gross Margin
In the quarter under review, Emerson's cost of sales decreased 14.4% year over year to $2,296 million. It represented 58.7% of net revenues compared with 57.3% in the year-ago quarter. Gross margin was at 41.3%, down 140 basis points on a year-over-year basis. Selling, general and administrative (SG&A) expenses declined 17.1% year over year to $934 million. As a percentage of sales, SG&A expenses were 23.9% compared with 24% in the year-ago quarter.
Balance Sheet and Cash Flow
Exiting the fiscal third quarter, Emerson had cash and cash equivalents of $2,450 million, up from $1,603 million at the end of the year-ago quarter. Long-term debt balance increased 26.8% year over year to $5,500 million. During the first nine months of fiscal 2020, the company repaid debts of $502 million.
In the first nine months of fiscal 2020, it generated net cash of $1,854 million from operating activities, reflecting an increase of 2.9% from the year-ago comparable period. Capital expenditure was $329 million, down from $395 million in the year-ago comparable period.
During the first nine months of fiscal 2020, the company paid out dividends amounting to $910 million and repurchased shares worth $942 million.
Outlook
For fiscal 2020 (ending September 2020), it anticipates net sales decline of 9-10%. Underlying sales are expected to fall 7.5-9%.
Adjusted earnings per share are predicted to be $3.20-$3.35 for fiscal 2020.
Emerson expects Automation Solutions’ net sales to decline 8-10%, while Commercial & Residential Solutions’ net sales are projected to decline 9-11%.
Notably, the company anticipates continued challenging but gradually improving demand environment in the fiscal fourth quarter and in the quarters ahead.
Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks are AGCO Corporation (AGCO - Free Report) , Avery Dennison Corporation (AVY - Free Report) and Berry Global Group, Inc. (BERY - Free Report) . While AGCO sports a Zacks Rank #1 (Strong Buy), Avery Dennison and Berry Global carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AGCO delivered an earnings surprise of 409.54%, on average, in the trailing four quarters.
Avery Dennison delivered an earnings surprise of 7.70%, on average, in the trailing four quarters.
Berry Global delivered an earnings surprise of 16.34%, on average, in the trailing four quarters.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>