Emerson's (EMR) Q3 Earnings Beat, Revenues Miss Estimates

Emerson Electric Co.EMR reported mixed results for third-quarter fiscal 2018 (Ended June 2018).


Adjusted earnings came in at 88 cents per share, higher than the year-ago tally of 68 cents per share. The bottom-line figure also surpassed the Zacks Consensus Estimate of 86 cents.

Revenues in the reported quarter came in at $4,456 million, up from the year-ago tally of $4,039 million. This upside stemmed from elevated demand from mature and emerging markets, acquisition benefits and favorable foreign currency-translation impact. However, the top-line figure missed the Zacks Consensus Estimate of $4,479 million.

Segmental Break-Up

Quarterly sales of Automation Solutions segment were $2,870 million, up 17.6% year over year.

However, the fiscal third-quarter revenues of Commercial & Residential Solutions segment came in at $1,592 million, down 0.6% year over year.

Emerson Electric Co. Price, Consensus and EPS Surprise

Emerson Electric Co. Price, Consensus and EPS Surprise | Emerson Electric Co. Quote


Cost of sales in the reported quarter was $2,361 million, down 5.8% year over year. Gross profit margin expanded 220 basis points (bps) year over year to 43.7%. The upside stemmed from stronger revenues and benefits of the restructuring actions undertaken last year.

Selling, general and administrative expenses in the reported quarter were $931 million, down from $1,054 million reported in the year-ago quarter. Adjusted earnings before interest and taxes (EBIT) margin was 18.1%, up 180 bps year over year.

Balance Sheet/Cash Flow

Exiting the fiscal third quarter, Emerson had cash and cash equivalents of $3,411 million, up from $3,140 million recorded as of Jun 30, 2017. Long-term debt came in at $3,126 million, down from $3,797 million witnessed in the comparable period last year.

In nine-month period ended fiscal 2018, the company generated $1,868 million cash from operating activities, up from $1,058 million recorded in the year-earlier period. Capital expenditure totaled $314 million, up 4.7% year over year.


Emerson expects that favorable end-market conditions will continue to drive its revenues and profitability in the quarters ahead. The company has raised its earnings view for fiscal 2018 from $3.10-$3.20 per share to $3.30-$3.40 per share.

This Zacks Rank #3 (Hold) company currently anticipates to generate 14% year-over-year net sales growth this fiscal.

Key Picks

Some better-ranked stocks in the Zacks Industrial Products sector are listed below:

Altra Industrial Motion Corp. AIMC sports a Zacks Rank of 1 (Strong Buy). The company pulled off an average positive earnings surprise of 4.01% over the trailing four quarters. You can see the complete list of today's Zacks #1 Rank stocks here .

Apogee Enterprises, Inc. APOG carries a Zacks Rank #2 (Buy). The company came with up an average positive earnings surprise of 0.88% over the preceding four quarters.

Avery Dennison Corporation AVY is another Zacks Rank #2 company. The stock generated an average positive earnings surprise of 6.10% during the same time frame.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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