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Emerson Electric Third Quarter Earnings
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EMR
Emerson Electric (NYSE:EMR) announced its results for the most recent quarter on August 7, 2012. Emerson Electric is a multinational technology company that designs and supplies product technology. It provides engineering services to a wide gamut of industrial, commercial, and consumer markets worldwide.
A business' earnings are the main determinant of its share price because earnings and the circumstances relating to them can indicate whether the business will be profitable and successful in the long run. SEE: Can Earnings Guidance Accurately Predict The Future?
The Numbers: Emerson Electric managed to exceed estimates with stronger-than-expected EPS and revenues. The company reported $1.04 per share versus the $1.01 per share estimate and revenues of $6.48 billion versus the $6 billion estimate. EPS rose 15.6% while revenue climbed 3.1% from the same period last year. Revenue rose for a second quarter in a row as Emerson Electric's sales grew 1.1% to $5.92 billion in the second quarter as well. Emerson Electric reported net income of $770 million during the third quarter. This is 12.7% higher than the year-ago quarter. Last quarter's profit boost ends a two-quarter streak of year-over-year profit decreases.
Management Quote: "This was a strong quarter in what has become an increasingly uncertain and weakening global economy," said Chairman and Chief Executive Officer David N. Farr. "We continued to recover from a challenging start to the year despite some obvious signs of slowness around the world. In the current business environment, underlying sales growth and margin expansion of this magnitude reflect strong operational execution and returns generated from our growth and restructuring investments."
A Look Back: Gross margins went up 0.8 percentage point to 40.5%. This growth seemed to be driven by an increase in revenue, as the figure rose 3.1% from the year-earlier quarter, while costs rose 1.7%.
Net income has increased 1.3% year-over-year on average across the last five quarters. The biggest gain came in the third quarter of the last fiscal year, when income climbed 16.8% from the year-earlier quarter.
Looking Ahead: For the next quarter, analysts are growing pessimistic about the company's expected results. The average estimate for the fourth quarter is $1.11 per share, dropping from $1.14 a month ago. A decreasing earning estimate is a negative sign and usually leads to a drop in the stock price. For the fiscal year, the average estimate has moved down from $3.49 a share to $3.38 over the last 90 days.
A business' earnings are the main determinant of its share price because earnings and the circumstances relating to them can indicate whether the business will be profitable and successful in the long run. SEE: Can Earnings Guidance Accurately Predict The Future?
The Numbers: Emerson Electric managed to exceed estimates with stronger-than-expected EPS and revenues. The company reported $1.04 per share versus the $1.01 per share estimate and revenues of $6.48 billion versus the $6 billion estimate. EPS rose 15.6% while revenue climbed 3.1% from the same period last year. Revenue rose for a second quarter in a row as Emerson Electric's sales grew 1.1% to $5.92 billion in the second quarter as well. Emerson Electric reported net income of $770 million during the third quarter. This is 12.7% higher than the year-ago quarter. Last quarter's profit boost ends a two-quarter streak of year-over-year profit decreases.
Management Quote: "This was a strong quarter in what has become an increasingly uncertain and weakening global economy," said Chairman and Chief Executive Officer David N. Farr. "We continued to recover from a challenging start to the year despite some obvious signs of slowness around the world. In the current business environment, underlying sales growth and margin expansion of this magnitude reflect strong operational execution and returns generated from our growth and restructuring investments."
A Look Back: Gross margins went up 0.8 percentage point to 40.5%. This growth seemed to be driven by an increase in revenue, as the figure rose 3.1% from the year-earlier quarter, while costs rose 1.7%.
Net income has increased 1.3% year-over-year on average across the last five quarters. The biggest gain came in the third quarter of the last fiscal year, when income climbed 16.8% from the year-earlier quarter.
Looking Ahead: For the next quarter, analysts are growing pessimistic about the company's expected results. The average estimate for the fourth quarter is $1.11 per share, dropping from $1.14 a month ago. A decreasing earning estimate is a negative sign and usually leads to a drop in the stock price. For the fiscal year, the average estimate has moved down from $3.49 a share to $3.38 over the last 90 days.
by
Investopedia Staff
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