Emerson Electric Co (EMR)

Shares of Emerson Electric Company (EMR) dropped by 7.41% from $91.74 to $84.94 in the trading on Tuesday, November 7, 2023. The reason why EMR down is due to mixed quarterly results:

• Earnings Miss: EMR reported Q4 fiscal 2023 adjusted earnings of $1.29 per share, falling short of the $1.30 estimated by Zacks Consensus.
• Revenue Miss: The company's net sales of $4,090 million missed the consensus estimate of $4,204 million. However, it represented a 5% YoY increase.
• Segment Performance: EMR now reports under two segments: Intelligent Devices: Net sales of $3,146 million (up 6% YoY). Software and Control Automation Solutions: Net sales of $963 million (up 3% YoY).
• Margin Improvement: While the cost of sales increased slightly, EMR saw a significant improvement in pretax earnings margin (22.1%) and adjusted EBITA margin (25.5%).
• Balance Sheet and Cash Flow: Cash and cash equivalents grew to $8,051 million. Long-term debt decreased to $7,610 million, with the company repaying $741 million in debt. Operating cash flow decreased by 78.2%, and capital expenditure increased. Dividends paid out amounted to $1,198 million, and common stocks worth $2,000 million were repurchased.
• Outlook: For Q1 fiscal 2024, EMR forecasts net sales growth of 14-17.5%, with underlying sales growth of 6.5-8.5%. Earnings per share are expected to be $0.45-$0.50, with adjusted earnings per share of $1.00-$1.05, slightly below the Zacks Consensus Estimate.
• FY24 Expectations: EMR anticipates net sales growth of 13-15.5%, with underlying sales rising 4-6%. Earnings per share for fiscal 2024 are projected at $3.82-$4.02, with adjusted earnings per share estimated to be $5.15-$5.35. Investors reacted negatively to the earnings miss and cautious fiscal 2024 outlook, leading to the stock's decline.