ST.
LOUIS, Feb. 7, 2024 /PRNewswire/ -- Emerson
(NYSE: EMR) today reported results1 for its first
quarter ended December 31, 2023 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 March 11, 2024
to stockholders of record on February 16,
2024.
(dollars in
millions, except per share)
|
2023
Q1
|
2024
Q1
|
Change
|
Underlying
Orders2
|
|
|
4 %
|
Net Sales
|
$3,373
|
$4,117
|
22 %
|
Underlying
Sales3
|
|
|
10 %
|
Pretax
Earnings
|
$422
|
$139
|
|
Margin
|
12.5 %
|
3.4 %
|
(910)
bps
|
Adjusted Segment
EBITA4
|
$765
|
$1,014
|
|
Margin
|
22.7 %
|
24.6 %
|
190
bps
|
GAAP Earnings Per
Share
|
$0.56
|
$0.25
|
(55) %
|
Adjusted Earnings Per
Share5
|
$0.78
|
$1.22
|
56 %
|
Operating Cash
Flow
|
$302
|
$444
|
47 %
|
Free Cash
Flow
|
$243
|
$367
|
51 %
|
Management Commentary
"Emerson's first quarter results exceeded expectations in key
financial metrics including underlying sales, operating leverage
and adjusted earnings per share," said Emerson President and Chief Executive Officer
Lal Karsanbhai. "Our strong start to the year, continued focus on
execution, and resilient process and hybrid demand provide the
confidence to update our 2024 outlook."
Karsanbhai continued, "NI, now referred to as Test &
Measurement, started the year strong delivering robust sales and
margins. We have increased and accelerated our synergy plan in Test
& Measurement and remain focused on creating value."
2024 Outlook
The following tables summarize the fiscal year 2024 guidance
framework. The 2024 outlook assumes approximately $500 million returned to shareholders through
share repurchases and approximately $1.2
billion of dividend payments. Guidance figures are
approximate.
|
2024
Q2
|
2024
|
Net Sales
Growth
|
12.5% -
14.5%
|
14.5% -
17.0%
|
Underlying Sales
Growth
|
3.5% - 5.5%
|
4.5% - 6.5%
|
Earnings Per
Share
|
$0.68 -
$0.72
|
$2.80 -
$2.95
|
Amortization of
Intangibles
|
~$0.35
|
~$1.42
|
Restructuring and
Related Costs
|
~$0.09
|
~$0.34
|
Loss on Copeland
Equity Method Investment
|
~$0.06
|
~$0.20
|
Amortization of
Acquisition-related Inventory Step-up
|
---
|
$0.38
|
Acquisition /
Divestiture Fees and Related Costs
|
~$0.04
|
~$0.26
|
Discrete Tax
Benefits
|
---
|
($0.10)
|
Adjusted Earnings Per
Share
|
$1.22 -
$1.26
|
$5.30 -
$5.45
|
Operating Cash
Flow
|
|
$3.0B -
$3.1B
|
Free Cash
Flow
|
|
$2.6B -
$2.7B
|
|
|
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 income/loss of Emerson's 40% share of Copeland, the
amortization of acquisition-related inventory step-up,
acquisition/divestiture fees and related costs, discrete tax
benefits, an AspenTech Micromine purchase price hedge, and
write-offs associated with Emerson's Russia exit.
|
Conference Call
Today, beginning at 8:00 a.m. Central
Time / 9:00 a.m. Eastern Time,
Emerson management will discuss the first quarter results during an
investor conference call. Participants can access a live webcast
available at www.emerson.com/investors at the time of the call. A
replay of the call will be available for 90 days. Conference call
slides will be posted in advance of the call on the company
website.
About Emerson
Emerson (NYSE: EMR) is a global technology and software company
providing innovative solutions for the world's essential
industries. Through its leading automation portfolio, including its
majority stake in AspenTech, Emerson helps hybrid, process and
discrete manufacturers optimize operations, protect personnel,
reduce emissions and achieve their sustainability goals. For more
information, visit Emerson.com.
Forward-Looking and Cautionary Statements
Statements in this press release that are not strictly
historical may be "forward-looking" statements, which involve risks
and uncertainties, and Emerson undertakes no obligation to update
any such statements to reflect later developments. These risks
and uncertainties include the scope, duration and ultimate impacts
of the Russia-Ukraine and other global conflicts, as well as
economic and currency conditions, market demand, pricing,
protection of intellectual property, cybersecurity, tariffs,
competitive and technological factors, inflation, among others, as
set forth in the Company's most recent Annual Report on Form 10-K
and subsequent reports filed with the SEC. The outlook contained
herein represents the Company's expectation for its consolidated
results, other than as noted herein.
Emerson uses our Investor Relations website,
www.Emerson.com/investors, as a means of disclosing information
which may be of interest or material to our investors and for
complying with disclosure obligations under Regulation FD.
Accordingly, investors should monitor our Investor Relations
website, in addition to following our press releases, SEC filings,
public conference calls, webcasts and social media. The information
contained on, or that may be accessed through, our website is not
incorporated by reference into, and is not a part of, this
document.
Investors:
|
Media:
|
Colleen
Mettler
|
Joseph Sala / Greg
Klassen
|
(314)
553-2197
|
Joele Frank, Wilkinson
Brimmer Katcher
|
|
(212)
355-4449
|
(tables attached)
|
|
|
Table
1
|
EMERSON AND
SUBSIDIARIES
|
CONSOLIDATED OPERATING
RESULTS
|
(AMOUNTS IN MILLIONS
EXCEPT PER SHARE, UNAUDITED)
|
|
|
|
|
|
Quarter Ended Dec
31
|
|
2022
|
|
2023
|
|
|
|
|
Net
sales
|
$
3,373
|
|
$
4,117
|
Cost and
expenses
|
|
|
|
Cost of sales
|
1,753
|
|
2,201
|
SG&A expenses
|
1,030
|
|
1,277
|
Other deductions,
net
|
120
|
|
487
|
Interest expense,
net
|
48
|
|
44
|
Interest income from related
party1
|
—
|
|
(31)
|
Earnings from
continuing operations before income taxes
|
422
|
|
139
|
Income taxes
|
98
|
|
7
|
Earnings from
continuing operations
|
324
|
|
132
|
Discontinued
operations, net of tax
|
2,002
|
|
—
|
Net
earnings
|
2,326
|
|
132
|
Less: Noncontrolling
interests in subsidiaries
|
(5)
|
|
(10)
|
Net earnings common
stockholders
|
$
2,331
|
|
$
142
|
|
|
|
|
Earnings common
stockholders
|
|
|
|
Earnings from
continuing operations
|
$
329
|
|
$
142
|
Discontinued
operations
|
2,002
|
|
—
|
Net earnings common
stockholders
|
$
2,331
|
|
$
142
|
|
|
|
|
Diluted avg. shares
outstanding
|
586.7
|
|
573.3
|
|
|
|
|
Diluted earnings per
share common stockholders
|
|
|
|
Earnings from
continuing operations
|
$
0.56
|
|
$
0.25
|
Discontinued
operations
|
3.41
|
|
—
|
Diluted earnings per
common share
|
$
3.97
|
|
$
0.25
|
|
|
|
|
|
|
|
|
|
Quarter Ended Dec
31
|
|
2022
|
|
2023
|
Other deductions,
net
|
|
|
|
Amortization of
intangibles
|
$
118
|
|
$
274
|
Restructuring
costs
|
10
|
|
83
|
Other
|
(8)
|
|
130
|
Total
|
$
120
|
|
$
487
|
|
|
|
|
1 Represents
interest on the Copeland note receivable
|
|
|
|
Table
2
|
EMERSON AND
SUBSIDIARIES
|
CONSOLIDATED BALANCE
SHEETS
|
(DOLLARS IN MILLIONS,
UNAUDITED)
|
|
|
|
|
|
|
|
|
|
Sept 30,
2023
|
|
Dec 31,
2023
|
Assets
|
|
|
|
Cash and
equivalents
|
$
8,051
|
|
$
2,076
|
Receivables, net
|
2,518
|
|
2,759
|
Inventories
|
2,006
|
|
2,432
|
Other current
assets
|
1,244
|
|
1,399
|
Total current
assets
|
13,819
|
|
8,666
|
Property, plant &
equipment, net
|
2,363
|
|
2,701
|
Goodwill
|
14,480
|
|
17,983
|
Other intangible
assets
|
6,263
|
|
11,270
|
Copeland note receivable and
equity investment
|
3,255
|
|
3,253
|
Other
|
2,566
|
|
2,640
|
Total
assets
|
$
42,746
|
|
$
46,513
|
|
|
|
|
Liabilities and
equity
|
|
|
|
Short-term borrowings and
current maturities of long-term debt
|
$
547
|
|
$
3,227
|
Accounts payable
|
1,275
|
|
1,234
|
Accrued expenses
|
3,210
|
|
3,304
|
Total current
liabilities
|
5,032
|
|
7,765
|
Long-term debt
|
7,610
|
|
7,632
|
Other liabilities
|
3,506
|
|
4,561
|
Equity
|
|
|
|
Common stockholders'
equity
|
20,689
|
|
20,674
|
Noncontrolling interests in
subsidiaries
|
5,909
|
|
5,881
|
Total equity
|
26,598
|
|
26,555
|
Total liabilities
and equity
|
$
42,746
|
|
$
46,513
|
|
|
|
|
Table
3
|
EMERSON AND
SUBSIDIARIES
|
CONSOLIDATED STATEMENTS
OF CASH FLOWS
|
(DOLLARS IN MILLIONS,
UNAUDITED)
|
|
|
|
|
|
|
Three Months Ended Dec
31
|
|
|
2022
|
|
2023
|
Operating
activities
|
|
|
|
|
Net
earnings
|
|
$
2,326
|
|
$
132
|
Earnings from
discontinued operations, net of tax
|
|
(2,002)
|
|
—
|
Adjustments to
reconcile net earnings to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and amortization
|
|
260
|
|
422
|
Stock
compensation
|
|
102
|
|
74
|
Amortization of acquisition-related inventory step-up
|
|
—
|
|
231
|
Changes in
operating working capital
|
|
(289)
|
|
(247)
|
Other,
net
|
|
(95)
|
|
(168)
|
Cash from continuing operations
|
|
302
|
|
444
|
Cash from discontinued operations
|
|
116
|
|
(29)
|
Cash provided by operating activities
|
|
418
|
|
415
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
Capital
expenditures
|
|
(59)
|
|
(77)
|
Purchases of
businesses, net of cash and equivalents acquired
|
|
—
|
|
(8,339)
|
Proceeds from
subordinated interest
|
|
15
|
|
—
|
Other, net
|
|
(23)
|
|
(37)
|
Cash from continuing operations
|
|
(67)
|
|
(8,453)
|
Cash from discontinued operations
|
|
2,953
|
|
1
|
Cash provided by (used in) investing activities
|
|
2,886
|
|
(8,452)
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
Net increase
(decrease) in short-term borrowings
|
|
(539)
|
|
2,647
|
Payments of long-term
debt
|
|
(9)
|
|
—
|
Dividends
paid
|
|
(306)
|
|
(300)
|
Purchases of common
stock
|
|
(2,000)
|
|
(175)
|
AspenTech purchases of
common stock
|
|
—
|
|
(72)
|
Other, net
|
|
(41)
|
|
(45)
|
Cash provided by (used in) financing activities
|
|
(2,895)
|
|
2,055
|
|
|
|
|
|
Effect of exchange
rate changes on cash and equivalents
|
|
58
|
|
7
|
Increase (decrease)
in cash and equivalents
|
|
467
|
|
(5,975)
|
Beginning cash and
equivalents
|
|
1,804
|
|
8,051
|
Ending cash and
equivalents
|
|
$
2,271
|
|
$
2,076
|
|
|
|
|
|
|
|
|
Table
4
|
EMERSON AND
SUBSIDIARIES
|
SEGMENT SALES AND
EARNINGS
|
(DOLLARS IN MILLIONS,
UNAUDITED)
|
|
The following tables
show results for the Company's segments on an adjusted segment
EBITA basis and are intended to supplement the Company's results of
operations, including its segment earnings which are defined as
earnings before interest and taxes. The Company defines adjusted
segment and total segment EBITA as segment earnings excluding
intangibles amortization expense, and restructuring and related
expense. Adjusted segment and total segment EBITA, and adjusted
segment and total segment EBITA margin are measures used by
management and may be useful for investors to evaluate the
Company's segments' operational performance.
|
|
|
Quarter Ended Dec
31
|
|
|
2022
|
|
2023
|
|
Reported
|
|
Underlying
|
|
Sales
|
|
|
|
|
|
|
|
|
Final
Control
|
$
862
|
|
$
940
|
|
9 %
|
|
9 %
|
|
Measurement &
Analytical
|
749
|
|
947
|
|
26 %
|
|
28 %
|
|
Discrete
Automation
|
618
|
|
613
|
|
(1) %
|
|
(2) %
|
|
Safety &
Productivity
|
310
|
|
322
|
|
4 %
|
|
3 %
|
|
Intelligent
Devices
|
$
2,539
|
|
$
2,822
|
|
11 %
|
|
11 %
|
|
|
|
|
|
|
|
|
|
|
Control Systems &
Software
|
606
|
|
675
|
|
11 %
|
|
11 %
|
|
Test &
Measurement
|
—
|
|
382
|
|
— %
|
|
— %
|
|
AspenTech
|
243
|
|
257
|
|
6 %
|
|
6 %
|
|
Software and
Control
|
$
849
|
|
$
1,314
|
|
55 %
|
|
9 %
|
|
|
|
|
|
|
|
|
|
|
Eliminations
|
(15)
|
|
(19)
|
|
|
|
|
|
Total
|
$
3,373
|
|
$
4,117
|
|
22 %
|
|
10 %
|
|
Sales Growth by
Geography
|
|
|
|
|
|
|
Quarter Ended
Dec 31
|
|
|
|
|
Americas
|
8 %
|
|
|
|
|
|
Europe
|
10 %
|
|
|
|
|
|
Asia, Middle East &
Africa
|
15 %
|
|
|
|
|
|
|
|
|
Table 4
cont.
|
|
|
|
|
|
Quarter Ended Dec
31
|
|
Quarter Ended Dec
31
|
|
2022
|
|
2023
|
|
As Reported
(GAAP)
|
|
Adjusted
EBITA
(Non-GAAP)
|
|
As Reported
(GAAP)
|
|
Adjusted
EBITA
(Non-GAAP)
|
Earnings
|
|
|
|
|
|
|
|
Final
Control
|
$
158
|
|
$
184
|
|
$
194
|
|
$
223
|
Margins
|
18.4 %
|
|
21.4 %
|
|
20.6 %
|
|
23.6 %
|
Measurement &
Analytical
|
175
|
|
181
|
|
235
|
|
258
|
Margins
|
23.4 %
|
|
24.1 %
|
|
24.9 %
|
|
27.3 %
|
Discrete
Automation
|
121
|
|
129
|
|
97
|
|
116
|
Margins
|
19.6 %
|
|
21.0 %
|
|
15.8 %
|
|
18.9 %
|
Safety &
Productivity
|
63
|
|
69
|
|
68
|
|
74
|
Margins
|
20.4 %
|
|
22.4 %
|
|
21.1 %
|
|
23.1 %
|
Intelligent
Devices
|
$
517
|
|
$
563
|
|
$
594
|
|
$
671
|
Margins
|
20.4 %
|
|
22.2 %
|
|
21.0 %
|
|
23.8 %
|
|
|
|
|
|
|
|
|
Control Systems &
Software
|
107
|
|
114
|
|
149
|
|
155
|
Margins
|
17.6 %
|
|
18.7 %
|
|
22.1 %
|
|
23.1 %
|
Test &
Measurement
|
—
|
|
—
|
|
(78)
|
|
101
|
Margins
|
— %
|
|
— %
|
|
(20.4) %
|
|
26.5 %
|
AspenTech
|
(33)
|
|
88
|
|
(35)
|
|
87
|
Margins
|
(13.6) %
|
|
36.6 %
|
|
(13.7) %
|
|
33.6 %
|
Software and
Control
|
$
74
|
|
$
202
|
|
$
36
|
|
$
343
|
Margins
|
8.7 %
|
|
23.8 %
|
|
2.8 %
|
|
26.1 %
|
|
|
|
|
|
|
|
|
Corporate items and
interest expense, net:
|
|
|
|
|
|
|
|
Stock
compensation
|
(102)
|
|
(102)
|
|
(74)
|
|
(44)
|
Unallocated pension and
postretirement costs
|
45
|
|
45
|
|
31
|
|
31
|
Corporate and
other
|
(64)
|
|
(44)
|
|
(399)
|
|
(38)
|
Loss on Copeland equity
method investment
|
—
|
|
—
|
|
(36)
|
|
—
|
Interest expense,
net
|
(48)
|
|
—
|
|
(44)
|
|
—
|
Interest income from
related party1
|
—
|
|
—
|
|
31
|
|
—
|
|
|
|
|
|
|
|
|
Pretax Earnings /
Adjusted EBITA
|
$
422
|
|
$
664
|
|
$
139
|
|
$
963
|
Margins
|
12.5 %
|
|
19.7 %
|
|
3.4 %
|
|
23.4 %
|
|
|
|
|
|
|
|
|
Supplemental Total
Segment Earnings:
|
|
|
|
|
|
|
|
Adjusted Total
Segment EBITA
|
|
|
$
765
|
|
|
|
$
1,014
|
Margins
|
|
|
22.7 %
|
|
|
|
24.6 %
|
|
|
|
|
|
|
|
|
1 Represents
interest on the Copeland note receivable.
|
|
|
|
|
Table 4
cont.
|
|
|
Quarter Ended Dec
31
|
|
Quarter Ended Dec
31
|
|
|
2022
|
|
2023
|
|
|
Amortization
of
Intangibles1
|
|
Restructuring
and
Related
Costs2
|
|
Amortization
of
Intangibles1
|
|
Restructuring
and
Related
Costs2
|
|
Final
Control
|
$
22
|
|
$
4
|
|
$
22
|
|
$
7
|
|
Measurement &
Analytical
|
5
|
|
1
|
|
20
|
|
3
|
|
Discrete
Automation
|
7
|
|
1
|
|
9
|
|
10
|
|
Safety &
Productivity
|
6
|
|
—
|
|
6
|
|
—
|
|
Intelligent
Devices
|
$
40
|
|
$
6
|
|
$
57
|
|
$
20
|
|
|
|
|
|
|
|
|
|
|
Control Systems &
Software
|
6
|
|
1
|
|
5
|
|
1
|
|
Test &
Measurement
|
—
|
|
—
|
|
139
|
|
40
|
|
AspenTech
|
121
|
|
—
|
|
122
|
|
—
|
|
Software and
Control
|
$
127
|
|
$
1
|
|
$
266
|
|
$
41
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
—
|
|
8
|
|
—
|
|
26
|
3
|
Total
|
$
167
|
|
$
15
|
|
$
323
|
|
$
87
|
|
|
|
|
|
|
|
|
|
|
1
Amortization of intangibles includes $49 and $49 reported in cost
of sales for the three months ended December 31, 2022 and 2023,
respectively.
|
2
Restructuring and related costs includes $5 and $4 reported in cost
of sales for the three months ended December 31, 2022 and 2023,
respectively.
|
3 Corporate
restructuring of $26 for the three months ended December 31, 2023
is comprised entirely of integration-related stock compensation
expense attributable to NI.
|
|
|
|
|
|
Quarter Ended Dec
31
|
Depreciation and
Amortization
|
2022
|
|
2023
|
Final
Control
|
$
45
|
|
$
40
|
Measurement &
Analytical
|
30
|
|
40
|
Discrete
Automation
|
21
|
|
22
|
Safety &
Productivity
|
14
|
|
14
|
Intelligent
Devices
|
110
|
|
116
|
|
|
|
|
Control Systems &
Software
|
21
|
|
21
|
Test &
Measurement
|
—
|
|
151
|
AspenTech
|
123
|
|
123
|
Software and
Control
|
144
|
|
295
|
|
|
|
|
Corporate
|
6
|
|
11
|
Total
|
$
260
|
|
$
422
|
|
|
|
|
|
Table
5
|
|
EMERSON AND
SUBSIDIARIES
ADJUSTED CORPORATE AND
OTHER SUPPLEMENTAL
(DOLLARS IN MILLIONS,
UNAUDITED)
|
|
The following table
shows the Company's stock compensation and corporate and other
expenses on an adjusted basis. The Company's definition of adjusted
stock compensation excludes integration-related stock compensation
expense. The Company's definition of adjusted corporate and other
excludes corporate restructuring and related costs, first year
purchase accounting related items and transaction fees, and certain
gains, losses or impairments. This metric is useful for reconciling
from total adjusted segment EBITA to the Company's consolidated
adjusted EBITA.
|
|
|
|
|
|
Quarter Ended Dec
31
|
|
|
|
|
|
|
2022
|
|
2023
|
|
Stock
compensation (GAAP)
|
|
|
|
|
$
(102)
|
|
$
(74)
|
|
Integration-related stock compensation
expense
|
|
|
|
|
—
|
|
30
|
1
|
Adjusted stock
compensation (non-GAAP)
|
|
|
|
|
$
(102)
|
|
$
(44)
|
|
|
|
|
|
|
Quarter Ended Dec
31
|
|
|
|
|
|
2022
|
|
2023
|
Corporate and
other (GAAP)
|
|
|
|
|
$
(64)
|
|
$
(399)
|
Corporate
restructuring and related costs
|
|
|
|
|
8
|
|
—
|
Acquisition /
divestiture costs
|
|
|
|
|
—
|
|
130
|
Amortization of
acquisition-related inventory step-up
|
|
|
|
|
—
|
|
231
|
Russia business
exit
|
|
|
|
|
47
|
|
—
|
AspenTech
Micromine purchase price hedge
|
|
|
|
|
(35)
|
|
—
|
Adjusted
corporate and other (non-GAAP)
|
|
|
|
|
$
(44)
|
|
$
(38)
|
|
|
|
|
|
|
|
|
1 Integration-related
stock compensation expense relates to NI and includes $26 reported
as restructuring costs.
|
|
|
|
Table
6
|
EMERSON AND
SUBSIDIARIES
|
ADJUSTED EBITA &
EPS SUPPLEMENTAL
|
(AMOUNTS IN MILLIONS
EXCEPT PER SHARE, UNAUDITED)
|
|
The following tables,
which show results on an adjusted EBITA basis and diluted earnings
per share on an adjusted basis, are intended to supplement the
Company's discussion of its results of operations herein. The
Company defines adjusted EBITA as earnings excluding interest
expense, net, income taxes, intangibles amortization expense,
restructuring expense, first year purchase accounting related items
and transaction fees, gains or losses on the Copeland equity method
investment, and certain gains, losses or impairments. Adjusted
earnings per share excludes intangibles amortization expense,
restructuring expense, first year purchase accounting related items
and transaction-related costs, gains or losses on the Copeland
equity method investment, and certain gains, losses or impairments.
Adjusted EBITA, adjusted EBITA margin, and adjusted earnings per
share are measures used by management and may be useful for
investors to evaluate the Company's operational
performance.
|
|
|
Quarter Ended Dec
31
|
|
2022
|
|
2023
|
Pretax
earnings
|
$
422
|
|
$
139
|
Percent of
sales
|
12.5 %
|
|
3.4 %
|
Interest expense,
net
|
48
|
|
44
|
Interest income from
related party1
|
—
|
|
(31)
|
Amortization of
intangibles
|
167
|
|
323
|
Restructuring and
related costs
|
15
|
|
87
|
Acquisition/divestiture fees and related
costs
|
—
|
|
134
|
Amortization of
acquisition-related inventory step-up
|
—
|
|
231
|
Loss on Copeland
equity method investment
|
—
|
|
36
|
Russia business
exit
|
47
|
|
—
|
AspenTech Micromine
purchase price hedge
|
(35)
|
|
—
|
Adjusted
EBITA
|
$
664
|
|
$
963
|
Percent of
sales
|
19.7 %
|
|
23.4 %
|
|
|
|
|
|
Quarter Ended Dec
31
|
|
2022
|
|
2023
|
GAAP earnings from
continuing operations per share
|
$
0.56
|
|
$
0.25
|
Amortization of
intangibles
|
0.15
|
|
0.36
|
Restructuring and
related costs
|
0.02
|
|
0.12
|
Acquisition/divestiture fees and related
costs
|
—
|
|
0.17
|
Amortization of
acquisition-related inventory step-up
|
—
|
|
0.38
|
Loss on Copeland
equity method investment
|
—
|
|
0.04
|
Discrete
taxes
|
—
|
|
(0.10)
|
Russia business
exit
|
0.08
|
|
—
|
AspenTech Micromine
purchase price hedge
|
(0.03)
|
|
—
|
Adjusted earnings
from continuing operations per share
|
$
0.78
|
|
$
1.22
|
Less: AspenTech
contribution to adjusted earnings per share
|
|
|
(0.07)
|
Adjusted earnings
per share excluding AspenTech contribution
|
|
|
$
1.15
|
|
|
|
|
1 Represents
interest on the Copeland note receivable
|
Table 6
cont.
|
Quarter Ended December
31, 2023
|
|
Pretax
Earnings
|
|
Income
Taxes
|
|
Earnings
from
Cont.
Ops.
|
|
Non-Controlling
Interests3
|
|
Net
Earnings
Common
Stockholders
|
|
Diluted
Earnings
Per
Share
|
As reported
(GAAP)
|
$
139
|
|
$
7
|
|
$
132
|
|
$
(10)
|
|
$
142
|
|
$
0.25
|
Amortization of
intangibles
|
323
|
1
|
74
|
|
249
|
|
41
|
|
208
|
|
0.36
|
Restructuring and
related costs
|
87
|
2
|
18
|
|
69
|
|
—
|
|
69
|
|
0.12
|
Acquisition/divestiture
fees and related costs
|
134
|
|
38
|
|
96
|
|
—
|
|
96
|
|
0.17
|
Amortization of
acquisition-related inventory step-up
|
231
|
|
14
|
|
217
|
|
—
|
|
217
|
|
0.38
|
Loss on Copeland equity
method investment
|
36
|
|
9
|
|
27
|
|
—
|
|
27
|
|
0.04
|
Discrete
taxes
|
—
|
|
57
|
|
(57)
|
|
—
|
|
(57)
|
|
(0.10)
|
Adjusted
(non-GAAP)
|
$
950
|
|
$
217
|
|
$
733
|
|
$
31
|
|
$
702
|
|
$
1.22
|
Interest expense,
net
|
44
|
|
|
|
|
|
|
|
|
|
|
Interest income from
related party4
|
(31)
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITA
(non-GAAP)
|
$
963
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Amortization of intangibles includes $49 reported in cost of
sales.
|
2
Restructuring and related costs includes $4 reported in cost of
sales.
|
3 Represents
the non-controlling interest in AspenTech applied to AspenTech's
share of each adjustment presented herein and eliminated from
Emerson's consolidated results.
|
4 Represents
interest on the Copeland note receivable.
|
Table
7
|
EMERSON AND
SUBSIDIARIES
|
ASPENTECH CONTRIBUTION
TO EMERSON RESULTS SUPPLEMENTAL
|
(AMOUNTS IN MILLIONS
EXCEPT PER SHARE, UNAUDITED)
|
|
The following tables
reconcile the financial results of AspenTech reported to its
shareholders with the amounts included in Emerson's consolidated
financial results. Emerson currently owns approximately 57 percent
of the common shares outstanding of AspenTech, a separately traded
public company (NASDAQ: AZPN), and consolidates AspenTech in its
financial results. The 43 percent non-controlling interest in
AspenTech is removed from Emerson's net earnings common
stockholders through the non-controlling interest line item.
AspenTech is also one of Emerson's segments and its GAAP segment
earnings is reconciled below to its consolidated impact to clarify
that certain items are reported outside of its segment earnings
within Emerson corporate, including interest income and stock
compensation.
|
|
Quarter Ended December
31, 2023
|
|
Pretax
Earnings
|
|
Income
Taxes
(Benefit)
|
|
Earnings
from
Cont.
Ops.
|
|
Non-Controlling
Interests4
|
|
Net
Earnings
Common
Stockholders
|
|
Diluted
Earnings
Per
Share
|
Standalone reporting
(GAAP)
|
$
(37)
|
1
|
$
(15)
|
|
$
(22)
|
|
|
|
|
|
|
Other
|
(2)
|
|
—
|
|
(2)
|
|
|
|
|
|
|
Reported in Emerson
consolidation (GAAP)
|
(39)
|
|
(15)
|
|
(24)
|
|
(10)
|
|
(14)
|
|
$
(0.02)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangibles
|
122
|
2
|
27
|
|
95
|
|
41
|
|
54
|
|
0.09
|
Adjusted
(Non-GAAP)
|
$
83
|
|
$
12
|
|
$
71
|
|
$
31
|
|
$
40
|
|
$
0.07
|
Interest
income
|
(12)
|
3
|
|
|
|
|
|
|
|
|
|
Stock
compensation
|
16
|
3
|
|
|
|
|
|
|
|
|
|
Adjusted segment
EBITA (non-GAAP)
|
$
87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation to
Segment EBIT
|
Pre-tax
earnings
|
$
(39)
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
(12)
|
3
|
|
|
|
|
|
|
|
|
|
Stock
compensation
|
16
|
3
|
|
|
|
|
|
|
|
|
|
Segment EBIT
(GAAP)
|
$
(35)
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangibles
|
122
|
2
|
|
|
|
|
|
|
|
|
|
Adjusted segment
EBITA (non-GAAP)
|
$
87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Amount
reflects AspenTech's pretax earnings for the three months ended
December 31, 2023 as reported in its quarterly earnings release
8-K.
|
2
Amortization of intangibles includes $49 reported in cost of
sales.
|
3 Reported
in Emerson corporate line items.
|
4 Represents
the non-controlling interest in AspenTech applied to each
adjustment presented herein and eliminated from Emerson's
consolidated results.
|
Reconciliations of
Non-GAAP Financial Measures & Other
|
Table
8
|
|
|
|
|
|
|
|
|
|
Reconciliations of
Non-GAAP measures with the most directly comparable GAAP measure
(dollars in millions, except per share amounts). See tables 4
through 7 for additional non-GAAP reconciliations.
|
|
|
|
|
|
|
|
|
|
2024 Q1 Underlying
Sales Change
|
Reported
|
(Favorable) /
Unfavorable FX
|
(Acquisitions)
|
Divestitures
|
Underlying
|
Final
Control
|
9 %
|
(1) %
|
— %
|
1 %
|
9 %
|
Measurement &
Analytical
|
26 %
|
— %
|
— %
|
2 %
|
28 %
|
Discrete
Automation
|
(1) %
|
(1) %
|
— %
|
— %
|
(2) %
|
Safety &
Productivity
|
4 %
|
(1) %
|
— %
|
— %
|
3 %
|
Intelligent
Devices
|
11 %
|
(1) %
|
— %
|
1 %
|
11 %
|
Control Systems &
Software
|
11 %
|
(1) %
|
— %
|
1 %
|
11 %
|
Test &
Measurement
|
— %
|
— %
|
— %
|
— %
|
— %
|
AspenTech
|
6 %
|
— %
|
— %
|
— %
|
6 %
|
Software and
Control
|
55 %
|
(1) %
|
(46) %
|
1 %
|
9 %
|
Emerson
|
22 %
|
(1) %
|
(12) %
|
1 %
|
10 %
|
Underlying Growth
Guidance
|
2024 Q2
Guidance
|
2024
Guidance
|
Reported
(GAAP)
|
12.5% -
14.5%
|
14.5% - 17%
|
(Favorable) /
Unfavorable FX
|
~- pts
|
~- pts
|
(Acquisitions)
|
~(9) pts
|
(10.0) - (10.5)
pts
|
Divestitures
|
~- pts
|
~- pts
|
Underlying
(non-GAAP)
|
3.5% -
5.5%
|
4.5% -
6.5%
|
2023 Q1 Adjusted
Segment EBITA
|
EBIT
|
EBIT
Margin
|
Amortization
of
Intangibles
|
Restructuring
and Related
Costs
|
Adjusted
Segment
EBITA
|
Adjusted
Segment
EBITA
Margin
|
Final
Control
|
$
158
|
18.4 %
|
$
22
|
$
4
|
$
184
|
21.4 %
|
Measurement &
Analytical
|
175
|
23.4 %
|
5
|
1
|
181
|
24.1 %
|
Discrete
Automation
|
121
|
19.6 %
|
7
|
1
|
129
|
21.0 %
|
Safety &
Productivity
|
63
|
20.4 %
|
6
|
—
|
69
|
22.4 %
|
Intelligent
Devices
|
$
517
|
20.4 %
|
$
40
|
$
6
|
$
563
|
22.2 %
|
Control Systems &
Software
|
107
|
17.6 %
|
6
|
1
|
114
|
18.7 %
|
Test &
Measurement
|
—
|
— %
|
—
|
—
|
—
|
— %
|
AspenTech
|
(33)
|
(13.6) %
|
121
|
—
|
88
|
36.6 %
|
Software and
Control
|
$
74
|
8.7 %
|
$
127
|
$
1
|
$
202
|
23.8 %
|
2024 Q1 Adjusted
Segment EBITA
|
EBIT
|
EBIT
Margin
|
Amortization
of
Intangibles
|
Restructuring
and Related
Costs
|
Adjusted
Segment
EBITA
|
Adjusted
Segment
EBITA
Margin
|
Final
Control
|
$
194
|
20.6 %
|
$
22
|
$
7
|
$
223
|
23.6 %
|
Measurement &
Analytical
|
235
|
24.9 %
|
20
|
3
|
258
|
27.3 %
|
Discrete
Automation
|
97
|
15.8 %
|
9
|
10
|
116
|
18.9 %
|
Safety &
Productivity
|
68
|
21.1 %
|
6
|
—
|
74
|
23.1 %
|
Intelligent
Devices
|
$
594
|
21.0 %
|
$
57
|
$
20
|
$
671
|
23.8 %
|
Control Systems &
Software
|
149
|
22.1 %
|
5
|
1
|
155
|
23.1 %
|
Test &
Measurement
|
(78)
|
(20.4) %
|
139
|
40
|
101
|
26.5 %
|
AspenTech
|
(35)
|
(13.7) %
|
122
|
—
|
87
|
33.6 %
|
Software and
Control
|
$
36
|
2.8 %
|
$
266
|
$
41
|
$
343
|
26.1 %
|
Total Adjusted
Segment EBITA
|
|
2023
Q1
|
2024
Q1
|
Pretax earnings
(GAAP)
|
|
$
422
|
$
139
|
Margin
|
|
12.5 %
|
3.4 %
|
Corporate items and
interest expense, net
|
|
169
|
491
|
Amortization of
intangibles
|
|
167
|
323
|
Restructuring and
related costs
|
|
7
|
61
|
Adjusted segment
EBITA (non-GAAP)
|
|
$
765
|
$
1,014
|
Margin
|
|
22.7 %
|
24.6 %
|
Free Cash
Flow
|
|
2023
Q1
|
2024
Q1
|
|
2024E
($ in
billions)
|
|
Operating cash flow
(GAAP)
|
|
$
302
|
$
444
|
|
$3.0 - $3.1
|
|
Capital
expenditures
|
|
(59)
|
(77)
|
|
~(0.4)
|
|
Free cash flow
(non-GAAP)
|
|
$
243
|
$
367
|
|
$2.6 -
$2.7
|
|
|
|
|
|
|
|
|
Note 1: Underlying
sales and orders exclude the impact of currency translation and
significant acquisitions and divestitures.
|
Note 2: All fiscal year
2024E figures are approximate, except where range is
given.
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/emerson-reports-first-quarter-2024-results-updates-2024-outlook-302055460.html
SOURCE Emerson