02.06.20
Emerson reported results for the first quarter ended Dec. 31, 2019, and announced updated guidance for the fiscal year.
First quarter net sales were flat at $4.2 billion, and underlying sales were flat excluding unfavorable currency of 1% and a positive impact from acquisitions net of divestitures of 1%. Growth was in-line with management’s expectations for Commercial & Residential Solutions but somewhat below expectations for Automation Solutions due mainly to slower North American upstream oil and gas markets and a global decline in discrete end-market demand.
First quarter gross profit margin of 42.4% was approximately flat compared with the prior year. Pretax margin of 10.2% and EBIT margin of 11.0% were down 4.0% and 4.3%, respectively.
GAAP earnings per share were $0.53 and adjusted earnings per share, which excludes $0.14 of restructuring and related charges ($110 million in total), were $0.67, in-line with management’s expectations due to a favorable impact from prior period restructuring actions, despite lower sales.
Operating cash flow was $424 million, up to $101 million, and free cash flow was $310 million, up to $142 million, reflecting free cash flow conversion of 94% in the quarter.
“Our first quarter results provide a solid start to the year,” said Emerson chairman and CEO David N. Farr. “Even with slightly lower-than-expected sales, we delivered in-line ad-justed earnings per share as our teams executed well and we realized benefits from the 2019 restructuring actions. Throughout the year, we plan to prioritize driving higher margins in a no-growth environment.
“Sales and underlying orders were slightly below our expectations in the first quarter as North American upstream operators further slowed investment spending and demand from distributors serving discrete manufacturing was weak in December,” Farr continued.
First quarter net sales were flat at $4.2 billion, and underlying sales were flat excluding unfavorable currency of 1% and a positive impact from acquisitions net of divestitures of 1%. Growth was in-line with management’s expectations for Commercial & Residential Solutions but somewhat below expectations for Automation Solutions due mainly to slower North American upstream oil and gas markets and a global decline in discrete end-market demand.
First quarter gross profit margin of 42.4% was approximately flat compared with the prior year. Pretax margin of 10.2% and EBIT margin of 11.0% were down 4.0% and 4.3%, respectively.
GAAP earnings per share were $0.53 and adjusted earnings per share, which excludes $0.14 of restructuring and related charges ($110 million in total), were $0.67, in-line with management’s expectations due to a favorable impact from prior period restructuring actions, despite lower sales.
Operating cash flow was $424 million, up to $101 million, and free cash flow was $310 million, up to $142 million, reflecting free cash flow conversion of 94% in the quarter.
“Our first quarter results provide a solid start to the year,” said Emerson chairman and CEO David N. Farr. “Even with slightly lower-than-expected sales, we delivered in-line ad-justed earnings per share as our teams executed well and we realized benefits from the 2019 restructuring actions. Throughout the year, we plan to prioritize driving higher margins in a no-growth environment.
“Sales and underlying orders were slightly below our expectations in the first quarter as North American upstream operators further slowed investment spending and demand from distributors serving discrete manufacturing was weak in December,” Farr continued.