| Emerson (NYSE: EMR) today reported results1 for its third quarter ended June 30, 2024 and updated its full year outlook for fiscal 2024. Emerson also declared a quarterly cash dividend of $0.525 per share of common stock payable September 10, 2024 to stockholders of record on August 16, 2024. |
| (dollars in millions, except per share) |
|
2023 Q3 |
2024 Q3 |
Change |
| Underlying Orders2 |
|
|
3% |
| Net Sales
Underlying Sales3 |
$3,946 |
$4,380 |
11%
3% |
| Pretax Earnings
Margin |
$822
20.8% |
$455
10.4% |
(1040) bps |
| Adjusted Segment EBITA4
Margin |
$1,060
26.9% |
$1,189
27.1% |
20 bps |
| GAAP Earnings Per Share
Adjusted Earnings Per Share5 |
$1.12
$1.29 |
$0.60
$1.43 |
(46)%
11% |
| Operating Cash Flow
Free Cash Flow |
$842
$769 |
$1,067
$975 |
27%
27% |
|
| Management Commentary |
| “Emerson delivered another strong quarter, with solid underlying orders growth and with profitability and cash flow both exceeding expectations,” said Emerson President and Chief Executive Officer Lal Karsanbhai. “Demand in process and hybrid markets, led by a constructive capex cycle, continues to meet expectations. Our operating leverage performance demonstrates the benefits of our highly differentiated technology and world-class Emerson Management System, giving us the confidence to execute on our plan for 2024." |
| Karsanbhai continued, “In the quarter, we also took another important step to simplify our portfolio and enhance our focus as a global leader in automation with the definitive agreement to completely exit the Copeland business. Emerson is creating value for our shareholders as we execute with our higher growth and higher margin automation portfolio.” |
| 2024 Outlook |
| The following tables summarize the fiscal year 2024 guidance framework for continuing operations6. The 2024 outlook assumes approximately $300 million returned to shareholders through share repurchases and approximately $1.2 billion of dividend payments. Guidance figures are approximate. |
|
|
2024 |
| Net Sales Growth
Underlying Sales Growth |
|
~15%
~6% |
| Earnings Per Share
Amortization of Intangibles
Restructuring and Related Costs
Loss on Copeland Note Receivable
Amortization of Acquisition-related Inventory Step-up
Acquisition / Divestiture Fees and Related Costs
Divestiture Loss / (Gain), net
Discrete Tax Benefits
Adjusted Earnings Per Share |
|
$2.82 - $2.87
~$1.42
~$0.34
$0.38
$0.38
~$0.24
($0.03)
($0.10)
$5.45 - $5.50 |
| Operating Cash Flow
Free Cash Flow |
|
~$3.2B
~$2.8B |
|
| Notes: |
| 1 Results are presented on a continuing operations basis. |
| 2 Underlying orders does not include AspenTech. |
| 3 Underlying sales excludes the impact of currency translation, and significant acquisitions and divestitures |
| 4 Adjusted segment EBITA represents segment earnings less restructuring and intangibles amortization expense. |
| 5 Adjusted EPS excludes intangibles amortization expense, restructuring and related costs, the amortization of acquisition-related inventory step-up, acquisition/divestiture gains, losses, fees and related costs, discrete tax benefits, an AspenTech Micromine purchase price hedge and write-offs associated with Emerson's Russia exit |
| 6 With the June 6, 2024, definitive agreement to completely exit its remaining interests in the Copeland joint venture, Emerson will report financial results for the Copeland equity ownership as discontinued operations for all periods presented, beginning in Q3 2024. The earnings from discontinued operations for 2024 are expected to be $0.55 to $0.60 per share, including the after-tax gain on the equity stake in Copeland. The Copeland Note Receivable interest income through June 6, 2024, remains in continuing operations. The pretax loss on the sale of the note receivable, $279M ($217M after-tax), is also reported in continuing operations but excluded from adjusted earnings per share, ($0.38). |
| Copeland Transaction Update |
| As of August 2, 2024, Emerson has completed the previously announced sale of the Copeland Note Receivable to Copeland with pretax cash proceeds of $1.9 billion. The sale of the 40% equity stake to private equity funds managed by Blackstone, with pretax cash proceeds of $1.5 billion, is expected to close by the end of August. Emerson intends to use the approximately $2.9 billion after-tax cash proceeds from both transactions to pay down its existing debt obligations. Both transactions are expected to result in a net pretax gain of approximately $0.2 billion. |
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Emerson Electric |
