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The Zacks Consensus Estimate for EMR’s earnings for the fiscal fourth quarter has been revised 1.2% upward in the past 90 days. However, Emerson has an impressive surprise history, with its earnings having outperformed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 6%.
Let’s see how things are shaping up for Emerson this earnings season.
Key Factors and Estimates for Q4
Emerson is expected to have benefited from strong demand for its technology, software and solutions in the fiscal fourth quarter.
Strength in the energy, chemicals, power, renewable, life sciences and metals and mining markets along with a robust backlog level in the Automation Solutions segment is likely to have augmented EMR’s top line in the to-be-reported quarter. The Zacks Consensus Estimate for the same indicates a 5% rise from the year-ago figure.
Robust momentum in the company’s commercial, industrial, food, retail and other non-residential end markets along with its solid backlog level at the Commercial & Residential Solutions segment is likely to have driven EMR’s performance in the fiscal fourth quarter. Our estimate for the segment’s revenues in the fiscal fourth quarter indicates a 7% rise from the year-ago reported number. The Zacks Consensus Estimate for the same indicates a 6.5% rise from the year-ago figure.
Emerson’s acquisition of Fluxa in July 2022 enables it to leverage Fluxa’s PKM software coupled with its DeltaV control system and life sciences automation software to provide customers with a comprehensive line of solutions for developing new drugs. This might have contributed to the company’s top-line growth in the quarter.
However, inflation in raw material cost, supply-chain constraints and labor problems are likely to have dented Emerson’s performance in the fiscal fourth quarter. Given the company’s international presence, a stronger U.S. dollar might have depressed its overseas business performance in the quarter.
Earnings Whispers
Our proven model suggests an earnings beat for Emerson this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here, as elaborated below.
Zacks Rank: Emerson currently carries a Zacks Rank #3.
Highlights of Q3 Earnings
Emerson reported third-quarter fiscal 2022 (ended Jun 30, 2022) adjusted earnings (excluding 16 cents from non-recurring items) of $1.38 per share, which outperformed the Zacks Consensus Estimate of $1.29. This compares with our estimate of $1.27. The bottom line improved by double digits in the reported quarter. Results benefited from strong growth in underlying orders and increased demand for technology, software and solutions.
Emerson’s net sales of $5,005 million fell short of the Zacks Consensus Estimate of $5,120.2 million. This compares with our estimate of $5,089.8 million. The top line increased 6.6% year over year. Underlying sales were up 7%.
Other Stocks to Consider
Here are some other companies within the broader Industrial Products sector, which according to our model, have the right combination of elements to beat on earnings in this reporting cycle.
Sonoco Products Company (SON - Free Report) has an Earnings ESP of +4.2% and a Zacks Rank #3. The company is slated to release third-quarter 2022 results on Oct 31.
Sonoco’s earnings have surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 4.1%.
AGCO Corporation (AGCO - Free Report) has an Earnings ESP of +1.96% and a Zacks Rank #3. The company is scheduled to release third-quarter 2022 results on Nov 1.
AGCO’s earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 37.5%.
Titan International, Inc. has an Earnings ESP of +9.28% and a Zacks Rank #3. The company is scheduled to release third-quarter 2022 results on Nov 7.
Titan’s earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 47%.
Image: Bigstock
What's in the Offing for Emerson (EMR) in Q4 Earnings?
Emerson Electric Co. (EMR - Free Report) is set to release fourth-quarter fiscal 2022 (ended September 2022) results on Nov 2, before market open.
The Zacks Consensus Estimate for EMR’s earnings for the fiscal fourth quarter has been revised 1.2% upward in the past 90 days. However, Emerson has an impressive surprise history, with its earnings having outperformed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 6%.
Let’s see how things are shaping up for Emerson this earnings season.
Key Factors and Estimates for Q4
Emerson is expected to have benefited from strong demand for its technology, software and solutions in the fiscal fourth quarter.
Strength in the energy, chemicals, power, renewable, life sciences and metals and mining markets along with a robust backlog level in the Automation Solutions segment is likely to have augmented EMR’s top line in the to-be-reported quarter. The Zacks Consensus Estimate for the same indicates a 5% rise from the year-ago figure.
Robust momentum in the company’s commercial, industrial, food, retail and other non-residential end markets along with its solid backlog level at the Commercial & Residential Solutions segment is likely to have driven EMR’s performance in the fiscal fourth quarter. Our estimate for the segment’s revenues in the fiscal fourth quarter indicates a 7% rise from the year-ago reported number. The Zacks Consensus Estimate for the same indicates a 6.5% rise from the year-ago figure.
Emerson’s acquisition of Fluxa in July 2022 enables it to leverage Fluxa’s PKM software coupled with its DeltaV control system and life sciences automation software to provide customers with a comprehensive line of solutions for developing new drugs. This might have contributed to the company’s top-line growth in the quarter.
However, inflation in raw material cost, supply-chain constraints and labor problems are likely to have dented Emerson’s performance in the fiscal fourth quarter. Given the company’s international presence, a stronger U.S. dollar might have depressed its overseas business performance in the quarter.
Earnings Whispers
Our proven model suggests an earnings beat for Emerson this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here, as elaborated below.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: Emerson has an Earnings ESP of +0.81% as the Most Accurate Estimate of $1.41 is above the Zacks Consensus Estimate of $1.31.
Emerson Electric Co. Price and Consensus
Emerson Electric Co. price-consensus-chart | Emerson Electric Co. Quote
Zacks Rank: Emerson currently carries a Zacks Rank #3.
Highlights of Q3 Earnings
Emerson reported third-quarter fiscal 2022 (ended Jun 30, 2022) adjusted earnings (excluding 16 cents from non-recurring items) of $1.38 per share, which outperformed the Zacks Consensus Estimate of $1.29. This compares with our estimate of $1.27. The bottom line improved by double digits in the reported quarter. Results benefited from strong growth in underlying orders and increased demand for technology, software and solutions.
Emerson’s net sales of $5,005 million fell short of the Zacks Consensus Estimate of $5,120.2 million. This compares with our estimate of $5,089.8 million. The top line increased 6.6% year over year. Underlying sales were up 7%.
Other Stocks to Consider
Here are some other companies within the broader Industrial Products sector, which according to our model, have the right combination of elements to beat on earnings in this reporting cycle.
Sonoco Products Company (SON - Free Report) has an Earnings ESP of +4.2% and a Zacks Rank #3. The company is slated to release third-quarter 2022 results on Oct 31.
Sonoco’s earnings have surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 4.1%.
AGCO Corporation (AGCO - Free Report) has an Earnings ESP of +1.96% and a Zacks Rank #3. The company is scheduled to release third-quarter 2022 results on Nov 1.
AGCO’s earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 37.5%.
Titan International, Inc. has an Earnings ESP of +9.28% and a Zacks Rank #3. The company is scheduled to release third-quarter 2022 results on Nov 7.
Titan’s earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 47%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.