ST.
LOUIS, Aug. 7, 2024 /PRNewswire/ -- Emerson
(NYSE: EMR) today reported results1 for its third
quarter ended June 30, 2024 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 September 10, 2024 to
stockholders of record on August 16,
2024.
|
(dollars in
millions, except per share)
|
|
2023
Q3
|
2024
Q3
|
Change
|
|
|
Underlying
Orders2
|
|
|
|
3 %
|
|
|
Net Sales
|
|
$3,946
|
$4,380
|
11 %
|
|
|
Underlying
Sales3
|
|
|
|
3 %
|
|
|
Pretax
Earnings
|
|
$822
|
$455
|
|
|
|
Margin
|
|
20.8 %
|
10.4 %
|
(1040)
bps
|
|
|
Adjusted Segment
EBITA4
|
|
$1,060
|
$1,189
|
|
|
|
Margin
|
|
26.9 %
|
27.1 %
|
20
bps
|
|
|
GAAP Earnings Per
Share
|
|
$1.12
|
$0.60
|
(46) %
|
|
|
Adjusted Earnings Per
Share5
|
|
$1.29
|
$1.43
|
11 %
|
|
|
Operating Cash
Flow
|
|
$842
|
$1,067
|
27 %
|
|
|
Free Cash
Flow
|
|
$769
|
$975
|
27 %
|
|
Management Commentary
"Emerson delivered another strong quarter, with solid underlying
orders growth and with profitability and cash flow both exceeding
expectations," said Emerson
President and Chief Executive Officer Lal Karsanbhai.
"Demand in process and hybrid markets, led by a constructive capex
cycle, continues to meet expectations. Our operating leverage
performance demonstrates the benefits of our highly differentiated
technology and world-class Emerson Management System, giving us the
confidence to execute on our plan for 2024."
Karsanbhai continued, "In the quarter, we also took another
important step to simplify our portfolio and enhance our focus as a
global leader in automation with the definitive agreement to
completely exit the Copeland business. Emerson is creating value
for our shareholders as we execute with our higher growth and
higher margin automation portfolio."
2024 Outlook
The following tables summarize the fiscal year 2024 guidance
framework for continuing operations6. The 2024 outlook
assumes approximately $300 million
returned to shareholders through share repurchases and
approximately $1.2 billion of
dividend payments. Guidance figures are approximate.
|
|
2024
|
|
Net Sales
Growth
|
|
~15%
|
|
Underlying Sales
Growth
|
|
~6%
|
|
Earnings Per
Share
|
|
$2.82 -
$2.87
|
|
Amortization of
Intangibles
|
|
~$1.42
|
|
Restructuring and
Related Costs
|
|
~$0.34
|
|
Loss on Copeland
Note Receivable
|
|
$0.38
|
|
Amortization of
Acquisition-related Inventory Step-up
|
|
$0.38
|
|
Acquisition /
Divestiture Fees and Related Costs
|
|
~$0.24
|
|
Divestiture Loss /
(Gain), net
|
|
($0.03)
|
|
Discrete Tax
Benefits
|
|
($0.10)
|
|
Adjusted Earnings Per
Share
|
|
$5.45 -
$5.50
|
|
Operating Cash
Flow
|
|
~$3.2B
|
|
Free Cash
Flow
|
|
~$2.8B
|
|
|
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
amortization of acquisition-related inventory step-up,
acquisition/divestiture gains, losses, fees and related costs,
discrete tax benefits, an AspenTech Micromine purchase price hedge
and write-offs associated with Emerson's Russia exit.
|
|
6 With the
June 6, 2024 definitive agreement to completely exit its remaining
interests in the Copeland joint venture, Emerson will report
financial results for the Copeland equity ownership as discontinued
operations for all periods presented, beginning in Q3 2024. The
earnings from discontinued operations for 2024 are expected to be
$0.55 to $0.60 per share, including the after-tax gain on the
equity stake in Copeland. The Copeland Note Receivable interest
income through June 6, 2024 remains in continuing operations. The
pretax loss on the sale of the note receivable, $279M ($217M
after-tax), is also reported in continuing operations but excluded
from adjusted earnings per share, ($0.38).
|
Copeland Transaction Update
As of August 2, 2024, Emerson has
completed the previously announced sale of the Copeland Note
Receivable to Copeland with pretax cash proceeds of $1.9 billion. The sale of the 40% equity stake to
private equity funds managed by Blackstone, with pretax cash
proceeds of $1.5 billion, is expected
to close by the end of August. Emerson intends to use the
approximately $2.9 billion after-tax
cash proceeds from both transactions to pay down its existing debt
obligations. Both transactions are expected to result in a net
pretax gain of approximately $0.2
billion.
Conference Call
Today, beginning at 8:00 a.m. Central
Time / 9:00 a.m. Eastern Time,
Emerson management will discuss the third 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
June 30,
|
|
Nine Months Ended
June 30,
|
|
|
|
2023
|
|
2024
|
|
2023
|
|
2024
|
|
|
|
|
|
|
|
|
|
Net
sales
|
$
3,946
|
|
$
4,380
|
|
$ 11,075
|
|
$ 12,873
|
|
Cost of sales
|
1,952
|
|
2,066
|
|
5,660
|
|
6,359
|
|
SG&A expenses
|
1,042
|
|
1,254
|
|
3,072
|
|
3,827
|
|
Gain on subordinated
interest
|
—
|
|
—
|
|
—
|
|
(79)
|
|
Loss on Copeland note
receivable
|
—
|
|
279
|
|
—
|
|
279
|
|
Other deductions,
net
|
130
|
|
294
|
|
359
|
|
1,075
|
|
Interest expense,
net
|
10
|
|
56
|
|
111
|
|
157
|
|
Interest income from related
party1
|
(10)
|
|
(24)
|
|
(10)
|
|
(86)
|
|
Earnings from
continuing operations before income taxes
|
822
|
|
455
|
|
1,883
|
|
1,341
|
|
Income taxes
|
168
|
|
88
|
|
400
|
|
266
|
|
Earnings from
continuing operations
|
654
|
|
367
|
|
1,483
|
|
1,075
|
|
Discontinued
operations, net of tax
|
8,712
|
|
(15)
|
|
10,979
|
|
(88)
|
|
Net
earnings
|
9,366
|
|
352
|
|
12,462
|
|
987
|
|
Less: Noncontrolling
interests in subsidiaries
|
14
|
|
23
|
|
(13)
|
|
15
|
|
Net earnings common
stockholders
|
$
9,352
|
|
$ 329
|
|
$ 12,475
|
|
$ 972
|
|
|
|
|
|
|
|
|
|
Earnings common
stockholders
|
|
|
|
|
|
|
|
|
Earnings from
continuing operations
|
$ 643
|
|
$ 344
|
|
$
1,502
|
|
$
1,060
|
|
Discontinued
operations
|
8,709
|
|
(15)
|
|
10,973
|
|
(88)
|
|
Net earnings common
stockholders
|
$
9,352
|
|
$ 329
|
|
$ 12,475
|
|
$ 972
|
|
|
|
|
|
|
|
|
|
Diluted avg. shares
outstanding
|
574.0
|
|
574.8
|
|
578.1
|
|
574.1
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share common stockholders
|
|
|
|
|
|
|
|
|
Earnings from
continuing operations
|
$1.12
|
|
$0.60
|
|
$2.60
|
|
$1.84
|
|
Discontinued
operations
|
15.16
|
|
(0.03)
|
|
18.96
|
|
(0.15)
|
|
Diluted earnings per
common share
|
$16.28
|
|
$0.57
|
|
$21.56
|
|
$1.69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
June 30,
|
|
Nine Months Ended
June 30,
|
|
|
|
2023
|
|
2024
|
|
2023
|
|
2024
|
|
Other deductions,
net
|
|
|
|
|
|
|
|
|
Amortization of
intangibles
|
$120
|
|
$264
|
|
$357
|
|
$811
|
|
Restructuring
costs
|
12
|
|
57
|
|
41
|
|
170
|
|
Other
|
(2)
|
|
(27)
|
|
(39)
|
|
94
|
|
Total
|
$130
|
|
$294
|
|
$359
|
|
$1,075
|
|
|
1 Represents
interest on the Copeland note receivable through June 6,
2024.
|
|
|
|
Table
2
|
|
EMERSON AND
SUBSIDIARIES
|
|
CONSOLIDATED BALANCE
SHEETS
|
|
(DOLLARS IN MILLIONS,
UNAUDITED)
|
|
|
|
|
|
Sept 30,
2023
|
|
June 30,
2024
|
|
Assets
|
|
|
|
|
Cash and
equivalents
|
$
8,051
|
|
$
2,298
|
|
Receivables, net
|
2,518
|
|
2,761
|
|
Inventories
|
2,006
|
|
2,303
|
|
Other current
assets
|
1,244
|
|
1,458
|
|
Total current
assets
|
13,819
|
|
8,820
|
|
Property, plant &
equipment, net
|
2,363
|
|
2,688
|
|
Goodwill
|
14,480
|
|
17,936
|
|
Other intangible
assets
|
6,263
|
|
10,627
|
|
Copeland note receivable and
equity investment held-for-sale
|
3,255
|
|
2,908
|
|
Other
|
2,566
|
|
2,606
|
|
Total
assets
|
$
42,746
|
|
$
45,585
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
Short-term borrowings and
current maturities of long-term debt
|
$
547
|
|
$
2,991
|
|
Accounts payable
|
1,275
|
|
1,251
|
|
Accrued expenses
|
3,210
|
|
3,350
|
|
Total current
liabilities
|
5,032
|
|
7,592
|
|
Long-term debt
|
7,610
|
|
7,111
|
|
Other liabilities
|
3,506
|
|
4,194
|
|
Equity
|
|
|
|
|
Common stockholders'
equity
|
20,689
|
|
20,799
|
|
Noncontrolling interests in
subsidiaries
|
5,909
|
|
5,889
|
|
Total equity
|
26,598
|
|
26,688
|
|
Total liabilities
and equity
|
$
42,746
|
|
$
45,585
|
|
|
|
|
Table
3
|
|
EMERSON AND
SUBSIDIARIES
|
|
CONSOLIDATED STATEMENTS
OF CASH FLOWS
|
|
(DOLLARS IN MILLIONS,
UNAUDITED)
|
|
|
|
|
|
|
Nine Months Ended June
30,
|
|
|
2023
|
|
2024
|
|
Operating
activities
|
|
|
|
|
|
Net
earnings
|
|
$
12,462
|
|
$
987
|
|
Earnings from
discontinued operations, net of tax
|
|
(10,979)
|
|
88
|
|
Adjustments to
reconcile net earnings to net cash provided by operating
activities:
|
|
|
|
|
|
Depreciation and amortization
|
|
780
|
|
1,263
|
|
Stock
compensation
|
|
198
|
|
203
|
|
Amortization of acquisition-related inventory step-up
|
|
—
|
|
231
|
|
Gain on
subordinated interest
|
|
—
|
|
(79)
|
|
Loss on
Copeland note receivable
|
|
—
|
|
279
|
|
Changes in
operating working capital
|
|
(359)
|
|
(176)
|
|
Other,
net
|
|
(383)
|
|
(552)
|
|
Cash from continuing operations
|
|
1,719
|
|
2,244
|
|
Cash from discontinued operations
|
|
(439)
|
|
4
|
|
Cash provided by operating activities
|
|
1,280
|
|
2,248
|
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
|
Capital
expenditures
|
|
(194)
|
|
(251)
|
|
Purchases of
businesses, net of cash and equivalents acquired
|
|
—
|
|
(8,342)
|
|
Proceeds from
subordinated interest
|
|
15
|
|
79
|
|
Proceeds from related
party note receivable
|
|
918
|
|
—
|
|
Other, net
|
|
(124)
|
|
(86)
|
|
Cash from continuing operations
|
|
615
|
|
(8,600)
|
|
Cash from discontinued operations
|
|
12,485
|
|
36
|
|
Cash provided by (used in) investing activities
|
|
13,100
|
|
(8,564)
|
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
|
Net increase
(decrease) in short-term borrowings
|
|
(1,476)
|
|
2,229
|
|
Proceeds from
short-term borrowings greater than three months
|
|
395
|
|
322
|
|
Payments of short-term
borrowings greater than three months
|
|
(400)
|
|
(100)
|
|
Payments of long-term
debt
|
|
(744)
|
|
(547)
|
|
Dividends
paid
|
|
(900)
|
|
(901)
|
|
Purchases of common
stock
|
|
(2,000)
|
|
(175)
|
|
AspenTech purchases of
common stock
|
|
(100)
|
|
(188)
|
|
Payment of related
party note payable
|
|
(918)
|
|
—
|
|
Other, net
|
|
(159)
|
|
(57)
|
|
Cash provided by (used in) financing activities
|
|
(6,302)
|
|
583
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash and equivalents
|
|
75
|
|
(20)
|
|
Increase (decrease)
in cash and equivalents
|
|
8,153
|
|
(5,753)
|
|
Beginning cash and
equivalents
|
|
1,804
|
|
8,051
|
|
Ending cash and
equivalents
|
|
$
9,957
|
|
$
2,298
|
|
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 June
30,
|
|
2023
|
|
2024
|
|
Reported
|
|
Underlying
|
|
Sales
|
|
|
|
|
|
|
|
|
Final
Control
|
$
1,035
|
|
$
1,046
|
|
1 %
|
|
2 %
|
|
Measurement &
Analytical
|
913
|
|
982
|
|
8 %
|
|
9 %
|
|
Discrete
Automation
|
668
|
|
618
|
|
(8) %
|
|
(6) %
|
|
Safety &
Productivity
|
363
|
|
351
|
|
(3) %
|
|
(3) %
|
|
Intelligent
Devices
|
$
2,979
|
|
$
2,997
|
|
1 %
|
|
2 %
|
|
|
|
|
|
|
|
|
|
Control Systems &
Software
|
663
|
|
700
|
|
6 %
|
|
7 %
|
|
Test &
Measurement
|
—
|
|
355
|
|
|
|
|
|
AspenTech
|
320
|
|
343
|
|
7 %
|
|
7 %
|
|
Software and
Control
|
$
983
|
|
$
1,398
|
|
42 %
|
|
7 %
|
|
|
|
|
|
|
|
|
|
Eliminations
|
(16)
|
|
(15)
|
|
|
|
|
|
Total
|
$
3,946
|
|
$
4,380
|
|
11 %
|
|
3 %
|
|
|
|
|
|
|
|
Sales Growth by
Geography
|
|
|
|
|
|
|
Quarter Ended
June 30,
|
|
|
|
|
|
Americas
|
3 %
|
|
|
|
|
|
|
Europe
|
4 %
|
|
|
|
|
|
|
Asia, Middle East &
Africa
|
2 %
|
|
|
|
|
|
|
|
|
Table 4
cont.
|
|
|
|
|
|
Nine Months Ended June
30,
|
|
2023
|
|
2024
|
|
Reported
|
|
Underlying
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
|
|
|
|
|
Final
Control
|
$
2,889
|
|
$
3,037
|
|
5 %
|
|
6 %
|
|
Measurement &
Analytical
|
2,550
|
|
2,942
|
|
15 %
|
|
17 %
|
|
Discrete
Automation
|
1,969
|
|
1,863
|
|
(5) %
|
|
(5) %
|
|
Safety &
Productivity
|
1,034
|
|
1,038
|
|
— %
|
|
— %
|
|
Intelligent
Devices
|
$
8,442
|
|
$
8,880
|
|
5 %
|
|
6 %
|
|
|
|
|
|
|
|
|
|
Control Systems &
Software
|
1,892
|
|
2,062
|
|
9 %
|
|
10 %
|
|
Test &
Measurement
|
—
|
|
1,104
|
|
|
|
|
|
AspenTech
|
793
|
|
878
|
|
11 %
|
|
11 %
|
|
Software and
Control
|
$
2,685
|
|
$
4,044
|
|
51 %
|
|
10 %
|
|
|
|
|
|
|
|
|
|
Eliminations
|
(52)
|
|
(51)
|
|
|
|
|
|
Total
|
$
11,075
|
|
$
12,873
|
|
16 %
|
|
7 %
|
|
|
|
|
|
|
|
|
|
Sales Growth by
Geography
|
|
|
|
|
|
|
|
|
Nine Months Ended
June 30,
|
|
|
|
|
|
Americas
|
5 %
|
|
|
|
|
|
|
|
Europe
|
9 %
|
|
|
|
|
|
|
|
Asia, Middle East &
Africa
|
9 %
|
|
|
|
|
|
|
|
|
|
Table 4
cont.
|
|
|
|
|
|
Quarter Ended June
30,
|
|
Quarter Ended June
30,
|
|
2023
|
|
2024
|
|
As Reported
(GAAP)
|
|
Adjusted
EBITA
(Non-GAAP)
|
|
As
Reported
(GAAP)
|
|
Adjusted
EBITA
(Non-GAAP)
|
|
Earnings
|
|
|
|
|
|
|
|
|
Final
Control
|
$
245
|
|
$
266
|
|
$
253
|
|
$
279
|
|
Margins
|
23.7 %
|
|
25.7 %
|
|
24.2 %
|
|
26.8 %
|
|
Measurement &
Analytical
|
257
|
|
263
|
|
252
|
|
266
|
|
Margins
|
28.1 %
|
|
28.7 %
|
|
25.6 %
|
|
27.0 %
|
|
Discrete
Automation
|
124
|
|
144
|
|
109
|
|
134
|
|
Margins
|
18.5 %
|
|
21.4 %
|
|
17.6 %
|
|
21.5 %
|
|
Safety &
Productivity
|
82
|
|
88
|
|
79
|
|
86
|
|
Margins
|
22.7 %
|
|
24.3 %
|
|
22.5 %
|
|
24.7 %
|
|
Intelligent
Devices
|
$
708
|
|
$
761
|
|
$
693
|
|
$
765
|
|
Margins
|
23.7 %
|
|
25.5 %
|
|
23.1 %
|
|
25.5 %
|
|
|
|
|
|
|
|
|
|
Control Systems &
Software
|
144
|
|
151
|
|
168
|
|
178
|
|
Margins
|
21.8 %
|
|
22.8 %
|
|
23.9 %
|
|
25.2 %
|
|
Test &
Measurement
|
—
|
|
—
|
|
(88)
|
|
76
|
|
Margins
|
|
|
|
|
(24.7) %
|
|
21.4 %
|
|
AspenTech
|
27
|
|
148
|
|
49
|
|
170
|
|
Margins
|
8.2 %
|
|
46.1 %
|
|
14.5 %
|
|
50.0 %
|
|
Software and
Control
|
$
171
|
|
$
299
|
|
$
129
|
|
$
424
|
|
Margins
|
17.4 %
|
|
30.4 %
|
|
9.2 %
|
|
30.3 %
|
|
|
|
|
|
|
|
|
|
Corporate items and
interest expense, net:
|
|
|
|
|
|
|
|
|
Stock
compensation
|
(56)
|
|
(56)
|
|
(56)
|
|
(47)
|
|
Unallocated pension and
postretirement costs
|
42
|
|
42
|
|
38
|
|
38
|
|
Corporate and
other
|
(43)
|
|
(19)
|
|
(38)
|
|
(24)
|
|
Gain on subordinated
interest
|
—
|
|
—
|
|
—
|
|
—
|
|
Loss on Copeland note
receivable
|
—
|
|
—
|
|
(279)
|
|
—
|
|
Interest expense,
net
|
(10)
|
|
—
|
|
(56)
|
|
—
|
|
Interest income from
related party1
|
10
|
|
—
|
|
24
|
|
—
|
|
Pretax Earnings /
Adjusted EBITA
|
$
822
|
|
$
1,027
|
|
$
455
|
|
$
1,156
|
|
Margins
|
20.8 %
|
|
26.0 %
|
|
10.4 %
|
|
26.4 %
|
|
|
|
|
|
|
|
|
|
Supplemental Total
Segment Earnings:
|
|
|
|
|
|
|
|
|
Adjusted Total
Segment EBITA
|
|
|
$
1,060
|
|
|
|
$
1,189
|
|
Margins
|
|
|
26.9 %
|
|
|
|
27.1 %
|
|
|
1 Represents
interest on the Copeland note receivable through June 6,
2024.
|
|
|
|
Table 4
cont.
|
|
|
Quarter Ended June
30,
|
|
Quarter Ended June
30,
|
|
|
2023
|
|
2024
|
|
|
Amortization
of
Intangibles1
|
|
Restructuring
and
Related
Costs2
|
|
Amortization
of
Intangibles1
|
|
Restructuring
and
Related
Costs2
|
|
|
Final
Control
|
$
22
|
|
$
(1)
|
|
$
21
|
|
$
5
|
|
|
Measurement &
Analytical
|
5
|
|
1
|
|
11
|
|
3
|
|
|
Discrete
Automation
|
8
|
|
12
|
|
9
|
|
16
|
|
|
Safety &
Productivity
|
7
|
|
(1)
|
|
6
|
|
1
|
|
|
Intelligent
Devices
|
$
42
|
|
$
11
|
|
$
47
|
|
$
25
|
|
|
|
|
|
|
|
|
|
|
|
Control Systems &
Software
|
6
|
|
1
|
|
6
|
|
4
|
|
|
Test &
Measurement
|
—
|
|
—
|
|
139
|
|
25
|
|
|
AspenTech
|
121
|
|
—
|
|
121
|
|
—
|
|
|
Software and
Control
|
$
127
|
|
$
1
|
|
$
266
|
|
$
29
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
—
|
|
1
|
|
—
|
|
6
|
3
|
|
Total
|
$
169
|
|
$
13
|
|
$
313
|
|
$
60
|
|
|
|
1
Amortization of intangibles includes $49 and $49 reported in cost
of sales for the three months ended June 30, 2023 and 2024,
respectively.
|
|
2
Restructuring and related costs includes $1 and $3 reported in cost
of sales and selling, general and administrative expenses for the
three months ended June 30, 2023 and 2024, respectively.
|
|
3 Corporate
restructuring of $6 for the three months ended June 30, 2024
includes $5 related to integration-related stock compensation
expense attributable to NI.
|
|
Quarter Ended June
30,
|
|
Depreciation and
Amortization
|
2023
|
|
2024
|
|
Final
Control
|
$
39
|
|
$
41
|
|
Measurement &
Analytical
|
26
|
|
32
|
|
Discrete
Automation
|
20
|
|
22
|
|
Safety &
Productivity
|
15
|
|
14
|
|
Intelligent
Devices
|
100
|
|
109
|
|
|
|
|
|
Control Systems &
Software
|
22
|
|
26
|
|
Test &
Measurement
|
—
|
|
150
|
|
AspenTech
|
123
|
|
122
|
|
Software and
Control
|
145
|
|
298
|
|
|
|
|
|
Corporate
|
12
|
|
10
|
|
Total
|
$
257
|
|
$
417
|
|
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 June
30,
|
|
|
|
|
|
|
2023
|
|
2024
|
|
|
Stock
compensation (GAAP)
|
|
|
|
|
$
(56)
|
|
$
(56)
|
|
|
Integration-related stock compensation
expense
|
|
|
|
|
—
|
|
9
|
1
|
|
Adjusted stock
compensation (non-GAAP)
|
|
|
|
|
$
(56)
|
|
$
(47)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended June
30,
|
|
|
|
|
|
|
2023
|
|
2024
|
|
|
Corporate and
other (GAAP)
|
|
|
|
|
$
(43)
|
|
$
(38)
|
|
|
Corporate
restructuring and related costs
|
|
|
|
|
1
|
|
1
|
|
|
Acquisition /
divestiture costs
|
|
|
|
|
38
|
|
13
|
|
|
National
Instruments investment gain
|
|
|
|
|
(12)
|
|
—
|
|
|
AspenTech
Micromine purchase price hedge
|
|
|
|
|
(3)
|
|
—
|
|
|
Adjusted
corporate and other (non-GAAP)
|
|
|
|
|
$
(19)
|
|
$
(24)
|
|
|
|
1
Integration-related stock compensation expense relates to NI and
includes $5 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, 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, 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 June
30,
|
|
2023
|
|
2024
|
|
Pretax
earnings
|
$
822
|
|
$
455
|
|
Percent of
sales
|
20.8 %
|
|
10.4 %
|
|
Interest expense,
net
|
10
|
|
56
|
|
Interest income from
related party1
|
(10)
|
|
(24)
|
|
Amortization of
intangibles
|
169
|
|
313
|
|
Restructuring and
related costs
|
13
|
|
60
|
|
Acquisition/divestiture fees and related
costs
|
38
|
|
17
|
|
National Instruments
investment gain
|
(12)
|
|
—
|
|
AspenTech Micromine
purchase price hedge
|
(3)
|
|
—
|
|
Loss on Copeland note
receivable
|
—
|
|
279
|
|
Adjusted
EBITA
|
$
1,027
|
|
$
1,156
|
|
Percent of
sales
|
26.0 %
|
|
26.4 %
|
|
|
|
|
|
Quarter Ended June
30,
|
|
2023
|
|
2024
|
|
GAAP earnings from
continuing operations per share
|
$
1.12
|
|
$
0.60
|
|
Amortization of
intangibles
|
0.15
|
|
0.35
|
|
Restructuring and
related costs
|
0.02
|
|
0.08
|
|
Acquisition/divestiture fees and related
costs
|
0.07
|
|
0.02
|
|
National Instruments
investment gain
|
(0.02)
|
|
—
|
|
Interest income on
undeployed proceeds from Copeland transaction
|
(0.05)
|
|
—
|
|
Loss on Copeland note
receivable
|
—
|
|
0.38
|
|
Adjusted earnings
from continuing operations per share
|
$
1.29
|
|
$
1.43
|
|
Less: AspenTech
contribution to adjusted earnings per share
|
(0.11)
|
|
(0.14)
|
|
Adjusted earnings
per share excluding AspenTech contribution
|
$
1.18
|
|
$
1.29
|
|
|
|
|
|
1 Represents
interest on the Copeland note receivable through June 6,
2024.
|
|
Table 6 cont.
|
|
Quarter Ended June 30,
2024
|
|
Pretax
Earnings
|
|
Income
Taxes
|
|
Earnings from
Cont.
Ops.
|
|
Non-Controlling
Interests3
|
|
Net
Earnings
Common
Stockholders
|
|
Diluted
Earnings
Per
Share
|
|
As reported
(GAAP)
|
$
455
|
|
$
88
|
|
$
367
|
|
$
23
|
|
$
344
|
|
$
0.60
|
|
Amortization of
intangibles
|
313
|
1
|
74
|
|
239
|
|
40
|
|
199
|
|
0.35
|
|
Restructuring and
related costs
|
60
|
2
|
14
|
|
46
|
|
—
|
|
46
|
|
0.08
|
|
Acquisition/divestiture
fees and related costs
|
17
|
|
2
|
|
15
|
|
—
|
|
15
|
|
0.02
|
|
Loss on Copeland note
receivable
|
279
|
|
62
|
|
217
|
|
—
|
|
217
|
|
0.38
|
|
Adjusted
(non-GAAP)
|
$
1,124
|
|
$
240
|
|
$
884
|
|
$
63
|
|
$
821
|
|
$
1.43
|
|
Interest expense,
net
|
56
|
|
|
|
|
|
|
|
|
|
|
|
Interest income from
related party4
|
(24)
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITA
(non-GAAP)
|
$
1,156
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Amortization of intangibles includes $49 reported in cost of
sales.
|
|
2
Restructuring and related costs includes $3 reported in cost of
sales and selling, general and administrative expenses.
|
|
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 through June 6,
2024.
|
|
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 June 30,
2024
|
|
Pretax
Earnings
|
|
Income
Taxes
(Benefit)
|
|
Earnings from
Cont.
Ops.
|
|
Non-Controlling
Interests4
|
|
Net
Earnings
Common
Stockholders
|
|
Diluted
Earnings
Per
Share
|
|
Standalone reporting
(GAAP)
|
$
53
|
1
|
$
8
|
|
$
45
|
|
|
|
|
|
|
|
Other
|
(1)
|
|
(5)
|
|
4
|
|
|
|
|
|
|
|
Reported in Emerson
consolidation (GAAP)
|
52
|
|
3
|
|
49
|
|
21
|
|
28
|
|
$
0.05
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangibles
|
121
|
2
|
27
|
|
94
|
|
40
|
|
54
|
|
0.09
|
|
Adjusted
(Non-GAAP)
|
$
173
|
|
$
30
|
|
$
143
|
|
$
61
|
|
$
82
|
|
$
0.14
|
|
Interest
income
|
(14)
|
3
|
|
|
|
|
|
|
|
|
|
|
Stock
compensation
|
11
|
3
|
|
|
|
|
|
|
|
|
|
|
Adjusted segment
EBITA (non-GAAP)
|
$
170
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation to
Segment EBIT
|
|
Pre-tax
earnings
|
$
52
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
(14)
|
3
|
|
|
|
|
|
|
|
|
|
|
Stock
compensation
|
11
|
3
|
|
|
|
|
|
|
|
|
|
|
Segment EBIT
(GAAP)
|
$
49
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangibles
|
121
|
2
|
|
|
|
|
|
|
|
|
|
|
Adjusted segment
EBITA (non-GAAP)
|
$
170
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Amount
reflects AspenTech's pretax earnings for the three months ended
June 30, 2024 as reported in its quarterly earnings release
8-K.
|
|
2
Amortization of intangibles includes $48 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 Q3 Underlying
Sales Change
|
Reported
|
(Favorable) /
Unfavorable FX
|
(Acquisitions)
/
Divestitures
|
Underlying
|
|
Final
Control
|
1 %
|
1 %
|
— %
|
2 %
|
|
Measurement &
Analytical
|
8 %
|
1 %
|
— %
|
9 %
|
|
Discrete
Automation
|
(8) %
|
2 %
|
— %
|
(6) %
|
|
Safety &
Productivity
|
(3) %
|
— %
|
— %
|
(3) %
|
|
Intelligent
Devices
|
1 %
|
1 %
|
— %
|
2 %
|
|
Control Systems &
Software
|
6 %
|
1 %
|
— %
|
7 %
|
|
Test &
Measurement
|
|
|
|
|
|
AspenTech
|
7 %
|
— %
|
— %
|
7 %
|
|
Software and
Control
|
42 %
|
1 %
|
(36) %
|
7 %
|
|
Emerson
|
11 %
|
1 %
|
(9) %
|
3 %
|
|
|
Nine Months Ended
June 30, 2024 Underlying Sales Change
|
Reported
|
(Favorable) /
Unfavorable FX
|
(Acquisitions)
/
Divestitures
|
Underlying
|
|
Final
Control
|
5 %
|
1 %
|
— %
|
6 %
|
|
Measurement &
Analytical
|
15 %
|
1 %
|
1 %
|
17 %
|
|
Discrete
Automation
|
(5) %
|
— %
|
— %
|
(5) %
|
|
Safety &
Productivity
|
— %
|
— %
|
— %
|
— %
|
|
Intelligent
Devices
|
5 %
|
1 %
|
— %
|
6 %
|
|
Control Systems &
Software
|
9 %
|
— %
|
1 %
|
10 %
|
|
Test &
Measurement
|
|
|
|
|
|
AspenTech
|
11 %
|
— %
|
— %
|
11 %
|
|
Software and
Control
|
51 %
|
— %
|
(41) %
|
10 %
|
|
Emerson
|
16 %
|
1 %
|
(10) %
|
7 %
|
|
Underlying Growth
Guidance
|
2024
Guidance
|
|
Reported
(GAAP)
|
~15%
|
|
(Favorable) /
Unfavorable FX
|
~0.5 pts
|
|
(Acquisitions) /
Divestitures
|
~(9.5) pts
|
|
Underlying
(non-GAAP)
|
~6%
|
|
2023 Q3 Adjusted
Segment EBITA
|
EBIT
|
EBIT
Margin
|
Amortization
of
Intangibles
|
Restructuring
and Related
Costs
|
Adjusted
Segment
EBITA
|
Adjusted
Segment
EBITA
Margin
|
|
Final
Control
|
$
245
|
23.7 %
|
$
22
|
$
(1)
|
$
266
|
25.7 %
|
|
Measurement &
Analytical
|
257
|
28.1 %
|
5
|
1
|
263
|
28.7 %
|
|
Discrete
Automation
|
124
|
18.5 %
|
8
|
12
|
144
|
21.4 %
|
|
Safety &
Productivity
|
82
|
22.7 %
|
7
|
(1)
|
88
|
24.3 %
|
|
Intelligent
Devices
|
$
708
|
23.7 %
|
$
42
|
$
11
|
$
761
|
25.5 %
|
|
Control Systems &
Software
|
144
|
21.8 %
|
6
|
1
|
151
|
22.8 %
|
|
Test &
Measurement
|
—
|
— %
|
—
|
—
|
—
|
— %
|
|
AspenTech
|
27
|
8.2 %
|
121
|
—
|
148
|
46.1 %
|
|
Software and
Control
|
$
171
|
17.4 %
|
$
127
|
$
1
|
$
299
|
30.4 %
|
|
|
2024 Q3 Adjusted
Segment EBITA
|
EBIT
|
EBIT
Margin
|
Amortization
of
Intangibles
|
Restructuring
and Related
Costs
|
Adjusted
Segment
EBITA
|
Adjusted
Segment
EBITA
Margin
|
|
Final
Control
|
$
253
|
24.2 %
|
$
21
|
$
5
|
$
279
|
26.8 %
|
|
Measurement &
Analytical
|
252
|
25.6 %
|
11
|
3
|
266
|
27.0 %
|
|
Discrete
Automation
|
109
|
17.6 %
|
9
|
16
|
134
|
21.5 %
|
|
Safety &
Productivity
|
79
|
22.5 %
|
6
|
1
|
86
|
24.7 %
|
|
Intelligent
Devices
|
$
693
|
23.1 %
|
$
47
|
$
25
|
$
765
|
25.5 %
|
|
Control Systems &
Software
|
168
|
23.9 %
|
6
|
4
|
178
|
25.2 %
|
|
Test &
Measurement
|
(88)
|
(24.7) %
|
139
|
25
|
76
|
21.4 %
|
|
AspenTech
|
49
|
14.5 %
|
121
|
—
|
170
|
50.0 %
|
|
Software and
Control
|
$
129
|
9.2 %
|
$
266
|
$
29
|
$
424
|
30.3 %
|
|
Total Adjusted
Segment EBITA
|
|
2023
Q3
|
2024
Q3
|
|
Pretax earnings
(GAAP)
|
|
$
822
|
$
455
|
|
Margin
|
|
20.8 %
|
10.4 %
|
|
Corporate items and
interest expense, net
|
|
57
|
367
|
|
Amortization of
intangibles
|
|
169
|
313
|
|
Restructuring and
related costs
|
|
12
|
54
|
|
Adjusted segment
EBITA (non-GAAP)
|
|
$
1,060
|
$
1,189
|
|
Margin
|
|
26.9 %
|
27.1 %
|
|
Free Cash
Flow
|
|
2023
Q3
|
2024
Q3
|
|
2024E
($ in
billions)
|
|
Operating cash flow
(GAAP)
|
|
$
842
|
$
1,067
|
|
~$3.2
|
|
Capital
expenditures
|
|
(73)
|
(92)
|
|
~(0.4)
|
|
Free cash flow
(non-GAAP)
|
|
$
769
|
$
975
|
|
~$2.8
|
|
|
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.
|
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SOURCE Emerson