Emerson's Q1 Meets Estimate - Analyst Blog
February 05 2013 - 5:58AM
Zacks
Emerson Electric Company (EMR) announced
first-quarter 2013 results before the market opened today,
reporting earnings per share of 62 cents, in line with the Zacks
Consensus Estimate. Earnings per share surged up 24% year over
year.
The company delivered an impressive earnings performance despite
the prevailing uncertain economic environment.
Total Revenue
Total revenue in the quarter increased by 5% year over year to
$5.6 billion. Divestiture and currency translations negatively
affected growth by 1%. Sales growth in the US sales increased by
6%, in Asia by 6% and declined by 2% in Europe.
Segment Results
Process Management sales were up by 24% during
the quarter, led by a rise in investment in the energy sector
globally and Climate Technologies sales increased
by 2%. This was the first time in six quarters that the Climate
Technologies segment witnessed an increase in revenue, resulting
from strong growth in Asia and improvement in the US.
However, sales in all other three segments declined during the
quarter. Industrial Automation sales declined 7%,
Network Power sales by 2% and Commercial
& Residential Solutions sales by 1%.
Income and
Expenses
Earnings before taxes for the quarter were $673 million compared
with $553 million in the prior-year quarter. Selling and general
expense was $1.39 billion compared with $1.35 billion in the
prior-year quarter.
Balance Sheet
Cash and Cash equivalents were $2.53 billion at the end of the
quarter with long-term debt of $3.54 billion and shareholders
equity of $10.17 billion compared with $2.08 billion, $4.04 billion
and $10.36 billion, respectively.
Capital expenditure of the company amounted to $115 million,
down from the prior amount of $15 million. Free cash flow in the
quarter was $439 million, up 115% year over year.
Outlook
Emerson expects its sales to increase by 2% to 5% in 2013 while
earnings per share are expected to be in the range of $3.53 to
$3.63.
The company expects to see an improvement in the market
conditions as it moves ahead, especially in the emerging markets.
The market conditions have stabilized, which resulted in an
increase in order trends.
Emerson is well-positioned to benefit from the long-term global
trends of infrastructure spending and improved energy efficiency.
Many of Emerson's products are key components for building the
infrastructure such as data centers, manufacturing plants and
office buildings. Emerging markets account for nearly one-third of
the total sales and this trend is expected to be a significant
source of growth in the upcoming quarter.
However, substantial sales in the international market are
subject to economic risks. Results of operations are affected by
foreign currency fluctuations.
Emerson Electric Company is a diversified global manufacturing
and technology company. It offers a wide range of products and
services in the areas of process management, climate technologies,
network power, storage solutions, professional tools, appliance
solutions, motor technologies, and industrial automation.
Emerson currently has a Zacks #3 Rank (Hold). Its close rivals
such as Interdigital Inc. (IDCC), Juniper
Networks (JNPR) and Clean Energy Fuels
Inc. (CLNE) all have a Zacks Rank #2 (Buy).
CLEAN EGY FUELS (CLNE): Free Stock Analysis Report
EMERSON ELEC CO (EMR): Free Stock Analysis Report
INTERDIGITL INC (IDCC): Free Stock Analysis Report
JUNIPER NETWRKS (JNPR): Free Stock Analysis Report
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