Emerson Electric Company (EMR - Free Report) recently announced that it has entered into multiple contracts with Indian Oil Corporation Limited — the leading commercial oil company in India. Notably, per the $12 million contract, Emerson will help IndianOil to modernize its operations and emissions programs at its refineries.
Notably, the contracts will involve Emerson to work as automation contractor, providing advanced technologies and refining proficiency. The project will include modernization of IndianOil’s 14 separate process units. These include diesel hydro-treating units planned for reducing sulfur content as well as octane-boosting units upgraded with desulfurization technologies. Some of the advanced technologies to be installed by Emerson are DeltaV safety instrumented systems, DeltaVTM distributed control systems, AMS asset management software, WirelessHART-enabled instruments and several wired field instruments.
In addition, the company will offer commissioning, factory-acceptance testing as well as training support services for IndianOil’s refineries based in Vadodara, Haldia, Bongaigaon and Panipat. As a matter of fact, this will enable IndianOil to adhere to Bharat Stage VI low-sulfur emissions standards.
Emerson is well positioned to benefit from favorable global industrial end markets, as its core businesses hold dominant positions in markets tied to energy efficiency and infrastructure spending. Going forward, the company’s Automation Solutions segment is likely to benefit from broad-based demand across most key markets, strong Maintenance, Repair and Operations projects as well as ongoing small to mid-sized brownfield and expansion projects.
This, along with the company’s cost-reduction moves, lower corporate taxes and greater operational efficacy will drive its profitability. In the past three months, the Zacks Rank #3 (Hold) stock has returned 11.1%, outperforming the industry’s rise of 6.1%.
However, escalating costs remain a cause of concern for Emerson. Notably, in the fiscal first quarter (ended December 2018), the company's cost of sales was up 9% year over year. As a matter of fact, it expects inflation environment to persist in the quarters ahead, and plans to have more material containment on account of the same.
Some better-ranked stocks from the Zacks Industrial Products sector are iRobot Corporation (IRBT - Free Report) , Avery Dennison Corporation (AVY - Free Report) and Brady Corporation (BRC - Free Report) . While iRobot sports a Zacks Rank #1 (Strong Buy), Avery Dennison and Brady carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
iRobot delivered average earnings surprise of 92.23% in the trailing four quarters.
Avery Dennison pulled off average positive earnings surprise of 3.63% in the trailing four quarters.
Brady delivered average earnings surprise of 5.71% in the trailing four quarters.
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