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Emerson (EMR) Q1 Earnings & Revenues Beat Estimates, Up Y/Y
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Emerson Electric Co. (EMR - Free Report) has reported better-than-expected first-quarter fiscal 2022 (ended Dec 31, 2021) results, with earnings and sales surpassing estimates by 6.1% and 0.1%, respectively.
The company’s adjusted earnings came in at $1.05 per share, beating the Zacks Consensus Estimate of 99 cents. On a year-over-year basis, the bottom line improved 13%.
Inside the Headlines
Emerson’s net sales were $4,473 million in the quarter, reflecting an increase of 8% from the year-ago quarter. Underlying sales were up 8%. The top line beat the Zacks Consensus Estimate of $4,470 million.
The company reports net sales under two segments — Automation Solutions and Commercial & Residential Solutions. Fiscal first-quarter segmental results are briefly discussed below:
Automation Solutions’ net sales were $2,805 million, increasing 4.2% year over year. Underlying sales of the segment increased 5%. Commercial & Residential Solutions generated net sales of $1,671 million in the fiscal first quarter, up 13.2% year over year. Underlying sales were up 13%. Under the segment, Climate Technologies’ sales increased 12.8% to $1,163 million and that from Tools & Home Products jumped 14.2% to $508 million.
Emerson Electric Co. Price, Consensus and EPS Surprise
In the quarter under review, Emerson's cost of sales increased 8.7% year over year to $2,651 million. It represented 59.3% of net sales compared with 58.6% in the year-ago quarter. Pretax margin in the quarter was 26.3%, up 1,280 basis points (bps). Adjusted EBITA margin came in at 19.6%, up 140 bps. Selling, general and administrative (SG&A) expenses increased 1.3% to $1,011 million. As a percentage of sales, SG&A expenses were 22.6% compared with 24% in the year-ago quarter.
Balance Sheet and Cash Flow
Exiting first-quarter fiscal 2022, Emerson had cash and cash equivalents of $4,726 million, up from $2,354 million in the previous quarter. Long-term debt balance increased 50.6% sequentially to $8,722 million. During the first three months of fiscal 2022, the company repaid debts of $501 million.
In the first three months of fiscal 2022, it generated net cash of $523 million from operating activities, reflecting a decrease of 35.3% from the year-ago period. Capital expenditure was $116 million, down from $122 million.
During the first three months of fiscal 2022, the company paid out dividends amounting to $307 million and repurchased shares worth $253 million.
Outlook
For fiscal 2022 (ending September 2022), it anticipates net sales growth of 6-8%, higher than 5-7% increase predicted earlier. Underlying sales are expected to grow in the range of 7-9%, compared with 6-8% growth projected earlier.
For fiscal 2022, adjusted earnings per share are predicted to lie in the range of $4.90-$5.05 compared with $4.82-$4.97 estimated previously.
For the fiscal year, Emerson expects Automation Solutions’ net sales to grow in the range of 5-7% while Commercial & Residential Solutions’ net sales are projected to increase 8-10%.
The company anticipates generating operating cash flow of $3.8 billion, with free cash flow of $3.1 billion. It expects to repurchase $250-$500 million worth of shares and pay dividends totaling $1.2 billion in fiscal 2022.
For the second quarter of fiscal 2022 (ending March 2022), it anticipates net sales growth of 4-6%. Underlying sales are expected to grow in the range of 6-8%.
For the fiscal second quarter, adjusted earnings per share are expected to lie in the range of $1.15-$1.20.
Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #4 (Sell).
Some better-ranked companies in the industry are discussed below.
AZZ’s earnings estimates increased 2.3% for fiscal 2022 (ending February 2022) and 3.7% for fiscal 2023 (ending February 2023) in the past 30 days. Its shares have lost 10% in the past three months.
Franklin Electric Co., Inc. (FELE - Free Report) presently carries a Zacks Rank #2. Its earnings surprise in the last four quarters was 16.27%, on average.
In the past 30 days, Franklin Electric’s earnings estimates have been stable for 2021 (results are awaited) and increased 0.6% for 2022. FELE’s shares have lost 2.8% in the past three months.
SPX FLOW, Inc. (FLOW - Free Report) presently carries a Zacks Rank #2. Its earnings surprise in the last four quarters was 40.42%, on average.
SPX FLOW’s earnings estimates have been stable for 2021 (results awaited) and increased 0.3% for 2022 in the past 30 days. FLOW’ shares have gained 10.5% in the past three months.
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Emerson (EMR) Q1 Earnings & Revenues Beat Estimates, Up Y/Y
Emerson Electric Co. (EMR - Free Report) has reported better-than-expected first-quarter fiscal 2022 (ended Dec 31, 2021) results, with earnings and sales surpassing estimates by 6.1% and 0.1%, respectively.
The company’s adjusted earnings came in at $1.05 per share, beating the Zacks Consensus Estimate of 99 cents. On a year-over-year basis, the bottom line improved 13%.
Inside the Headlines
Emerson’s net sales were $4,473 million in the quarter, reflecting an increase of 8% from the year-ago quarter. Underlying sales were up 8%. The top line beat the Zacks Consensus Estimate of $4,470 million.
The company reports net sales under two segments — Automation Solutions and Commercial & Residential Solutions. Fiscal first-quarter segmental results are briefly discussed below:
Automation Solutions’ net sales were $2,805 million, increasing 4.2% year over year. Underlying sales of the segment increased 5%. Commercial & Residential Solutions generated net sales of $1,671 million in the fiscal first quarter, up 13.2% year over year. Underlying sales were up 13%. Under the segment, Climate Technologies’ sales increased 12.8% to $1,163 million and that from Tools & Home Products jumped 14.2% to $508 million.
Emerson Electric Co. Price, Consensus and EPS Surprise
Emerson Electric Co. price-consensus-eps-surprise-chart | Emerson Electric Co. Quote
Margin Details
In the quarter under review, Emerson's cost of sales increased 8.7% year over year to $2,651 million. It represented 59.3% of net sales compared with 58.6% in the year-ago quarter. Pretax margin in the quarter was 26.3%, up 1,280 basis points (bps). Adjusted EBITA margin came in at 19.6%, up 140 bps. Selling, general and administrative (SG&A) expenses increased 1.3% to $1,011 million. As a percentage of sales, SG&A expenses were 22.6% compared with 24% in the year-ago quarter.
Balance Sheet and Cash Flow
Exiting first-quarter fiscal 2022, Emerson had cash and cash equivalents of $4,726 million, up from $2,354 million in the previous quarter. Long-term debt balance increased 50.6% sequentially to $8,722 million. During the first three months of fiscal 2022, the company repaid debts of $501 million.
In the first three months of fiscal 2022, it generated net cash of $523 million from operating activities, reflecting a decrease of 35.3% from the year-ago period. Capital expenditure was $116 million, down from $122 million.
During the first three months of fiscal 2022, the company paid out dividends amounting to $307 million and repurchased shares worth $253 million.
Outlook
For fiscal 2022 (ending September 2022), it anticipates net sales growth of 6-8%, higher than 5-7% increase predicted earlier. Underlying sales are expected to grow in the range of 7-9%, compared with 6-8% growth projected earlier.
For fiscal 2022, adjusted earnings per share are predicted to lie in the range of $4.90-$5.05 compared with $4.82-$4.97 estimated previously.
For the fiscal year, Emerson expects Automation Solutions’ net sales to grow in the range of 5-7% while Commercial & Residential Solutions’ net sales are projected to increase 8-10%.
The company anticipates generating operating cash flow of $3.8 billion, with free cash flow of $3.1 billion. It expects to repurchase $250-$500 million worth of shares and pay dividends totaling $1.2 billion in fiscal 2022.
For the second quarter of fiscal 2022 (ending March 2022), it anticipates net sales growth of 4-6%. Underlying sales are expected to grow in the range of 6-8%.
For the fiscal second quarter, adjusted earnings per share are expected to lie in the range of $1.15-$1.20.
Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #4 (Sell).
Some better-ranked companies in the industry are discussed below.
AZZ Inc. (AZZ - Free Report) presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Its earnings surprise for the last four quarters was 16.90%, on average.
AZZ’s earnings estimates increased 2.3% for fiscal 2022 (ending February 2022) and 3.7% for fiscal 2023 (ending February 2023) in the past 30 days. Its shares have lost 10% in the past three months.
Franklin Electric Co., Inc. (FELE - Free Report) presently carries a Zacks Rank #2. Its earnings surprise in the last four quarters was 16.27%, on average.
In the past 30 days, Franklin Electric’s earnings estimates have been stable for 2021 (results are awaited) and increased 0.6% for 2022. FELE’s shares have lost 2.8% in the past three months.
SPX FLOW, Inc. (FLOW - Free Report) presently carries a Zacks Rank #2. Its earnings surprise in the last four quarters was 40.42%, on average.
SPX FLOW’s earnings estimates have been stable for 2021 (results awaited) and increased 0.3% for 2022 in the past 30 days. FLOW’ shares have gained 10.5% in the past three months.