Back to top

Image: Bigstock

Why Emerson Electric (EMR) International Revenue Trends Deserve Your Attention

Read MoreHide Full Article

Have you assessed how the international operations of Emerson Electric (EMR - Free Report) performed in the quarter ended March 2024? For this maker of process controls systems, valves and analytical instruments, possessing an expansive global footprint, parsing the trends of international revenues could be critical to gauge its financial resilience and growth prospects.

In the current global economy, which is more interconnected than ever, a company's success in penetrating international markets is crucial for its financial health and growth journey. Investors must understand a company's dependence on overseas markets, as this offers a window into the company's earnings stability, its ability to benefit from varied economic cycles and its potential for long-term growth.

International market involvement serves as insurance against economic downturns at home and enables engagement with economies that are growing more quickly. Still, this move toward diversification is not without its challenges, as it involves navigating through the fluctuations of currencies, geopolitical threats, and the distinctive nature of various markets.

In our recent assessment of EMR's quarterly performance, we discovered notable trends in its overseas revenue sections, which are typically modeled and scrutinized by Wall Street analysts.

For the quarter, the company's total revenue amounted to $4.38 billion, experiencing an increase of 16.5% year over year. Next, we'll explore the breakdown of EMR's international revenue to understand the importance of its overseas business operations.

A Dive into EMR's International Revenue Trends

Asia, Middle East & Africa accounted for 29.8% of the company's total revenue during the quarter, translating to $1.31 billion. Revenues from this region represented a surprise of +0.89%, with Wall Street analysts collectively expecting $1.29 billion. When compared to the preceding quarter and the same quarter in the previous year, Asia, Middle East & Africa contributed $1.24 billion (30.1%) and $1.11 billion (29.6%) to the total revenue, respectively.

Europe generated $895 million in revenues for the company in the last quarter, constituting 20.5% of the total. This represented a surprise of +10.87% compared to the $807.22 million projected by Wall Street analysts. Comparatively, in the previous quarter, Europe accounted for $808 million (19.6%), and in the year-ago quarter, it contributed $704 million (18.7%) to the total revenue.

Revenue Forecasts for the International Markets

The current fiscal quarter's total revenue for Emerson Electric, as projected by Wall Street analysts, is expected to reach $4.43 billion, reflecting an increase of 12.3% from the same quarter last year. The breakdown of this revenue by foreign region is as follows: Asia, Middle East & Africa is anticipated to contribute 30.5% or $1.35 billion and Europe 19% or $841.35 million.

For the full year, the company is projected to achieve a total revenue of $17.56 billion, which signifies a rise of 15.8% from the last year. The share of this revenue from various regions is expected to be: Asia, Middle East & Africa at 30.3% ($5.32 billion) and Europe at 19.1% ($3.35 billion).

In Conclusion

Emerson Electric's reliance on international markets for revenues offers both opportunities and risks. Hence, keeping an eye on its international revenue trends could significantly help forecast the company's prospects.

In a world where international interdependencies and geopolitical conflicts are ever-increasing, Wall Street analysts closely monitor these trends for companies having international presence to adjust their earnings forecasts. Of course, there are several other factors, including a company's standing within its home borders, that influence analysts' earnings forecasts.

Emphasizing a company's shifting earnings prospects is a key aspect of our approach at Zacks, especially since research has proven its substantial influence on a stock's price in the short run. This correlation is positively aligned, meaning that improved earnings projections tend to boost the stock's price.

The Zacks Rank, our proprietary stock rating mechanism, demonstrates a notable performance history confirmed through external audits. It effectively utilizes the power of earnings estimate revisions to act as a predictor of a stock's price performance in the near term.

Emerson Electric, bearing a Zacks Rank #2 (Buy), is expected to outperform the broader market's movements in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Reviewing Emerson Electric's Recent Stock Price Trends

The stock has increased by 2.6% over the past month compared to the 1.3% rise of the Zacks S&P 500 composite. Meanwhile, the Zacks Industrial Products sector, which includes Emerson Electric, has decreased 0.2% during this time frame. Over the past three months, the company's shares have experienced a gain of 8.9% relative to the S&P 500's 4.3% increase. Throughout this period, the sector overall has witnessed a 7.2% increase.

See More Zacks Research for These Tickers

Normally $25 each - click below to receive one report FREE:

Emerson Electric Co. (EMR) - free report >>

Published in