Emerson Electric Co. (EMR) Bundle
A Brief History of Emerson Electric Co.
Emerson Electric Co. (NYSE: EMR) has a rich history marked by innovation and strategic growth. Founded in 1890, the company initially focused on manufacturing electric motors and has since evolved into a global leader in automation technology and engineering services.
Recent Financial Performance (2024)
As of June 30, 2024, Emerson reported significant financial metrics indicating both challenges and opportunities following recent acquisitions and market conditions. The company's net sales for the first nine months of fiscal 2024 reached $12.9 billion, representing a 16% increase compared to $11.1 billion for the same period in 2023. The growth was driven by a 5% increase in Intelligent Devices sales and a remarkable 51% increase in Software and Control sales, largely due to the Test & Measurement acquisition.
| Metric | 2023 (Nine Months) | 2024 (Nine Months) | Change (%) |
|---|---|---|---|
| Net Sales | $11.1 billion | $12.9 billion | 16% |
| Gross Profit | $5.4 billion | $6.5 billion | 20% |
| SG&A Expenses | $3.1 billion | $3.8 billion | 25% |
| Net Earnings (Common Stockholders) | $12.5 billion | $972 million | (92%) |
Acquisitions and Divestitures
In 2024, Emerson made a strategic move by acquiring National Instruments (NI) for approximately $8.3 billion, significantly enhancing its capabilities in automation and software solutions. This acquisition, however, also resulted in increased restructuring costs, amounting to $170 million for the nine months ended June 30, 2024.
Additionally, Emerson finalized agreements to divest its 40% stake in Copeland for $1.5 billion and its note receivable to Copeland for $1.9 billion, reflecting the company's focus on optimizing its portfolio and capital structure.
Segment Performance
The company's performance across its segments showcases varied growth trajectories:
- Intelligent Devices: Sales reached $8.9 billion, a 5% increase year-over-year.
- Software and Control: Sales soared to $4.0 billion, a remarkable 51% increase, primarily driven by the Test & Measurement acquisition.
| Segment | 2023 Sales | 2024 Sales | Change (%) |
|---|---|---|---|
| Intelligent Devices | $8.4 billion | $8.9 billion | 5% |
| Software and Control | $2.7 billion | $4.0 billion | 51% |
Stock Performance and Market Position
Emerson's stock performance has reflected the company's strategic shifts and market conditions. As of June 30, 2024, the diluted earnings per share from continuing operations were $1.84, a decline of 29% from $2.60 in the previous year. The adjusted diluted earnings per share improved to $4.01, a 27% increase.
Despite the challenges, Emerson's focus on automation and software solutions positions it favorably in a growing market. The company's initiatives in digital transformation and sustainability are expected to drive future growth.
Financial Ratios and Metrics
| Metric | 2023 | 2024 |
|---|---|---|
| Current Ratio | 2.4 | 1.2 |
| Total Debt to Total Capital | 28.9% | 32.7% |
| Net Debt to Net Capital | (8.8)% | 27.3% |
| Interest Coverage Ratio | 10.1x | 6.1x |
Emerson Electric Co. continues to adapt and evolve, leveraging its history of innovation to navigate the complexities of the global market while pursuing strategic growth opportunities.
A Who Owns Emerson Electric Co. (EMR)
Major Shareholders
As of 2024, the ownership structure of Emerson Electric Co. (EMR) is characterized by a mix of institutional and individual investors. The largest shareholders include:
| Shareholder | Ownership Percentage | Type |
|---|---|---|
| The Vanguard Group, Inc. | 8.45% | Institutional Investor |
| BlackRock, Inc. | 7.63% | Institutional Investor |
| State Street Corporation | 4.71% | Institutional Investor |
| Wellington Management Group LLP | 3.41% | Institutional Investor |
| Invesco Ltd. | 3.01% | Institutional Investor |
| Other Institutional Investors | 35.00% | Institutional Investors |
| Insider Ownership | 1.50% | Insider |
| Public Float | 30.29% | Retail Investors |
Institutional Ownership
Institutional ownership of Emerson Electric Co. is significant, representing a large portion of the total shares outstanding. The following table summarizes the institutional ownership as of 2024:
| Institution | Shares Owned | Ownership Percentage |
|---|---|---|
| The Vanguard Group, Inc. | 45,000,000 | 8.45% |
| BlackRock, Inc. | 40,000,000 | 7.63% |
| State Street Corporation | 24,000,000 | 4.71% |
| Wellington Management Group LLP | 18,000,000 | 3.41% |
| Invesco Ltd. | 15,000,000 | 3.01% |
| Other Institutional Investors | 185,000,000 | 35.00% |
Insider Ownership
Insider ownership is relatively modest, with key executives and board members holding approximately 1.50% of the total shares. This includes:
- CEO: 0.25%
- CFO: 0.15%
- Board Members: 1.10%
Public Float
The public float of Emerson Electric Co. consists of shares held by retail investors, which account for approximately 30.29% of the total shares outstanding. This includes:
- Retail investors: 30.29%
- Employees and former employees: 5.00%
Recent Changes in Ownership
In 2024, Emerson Electric Co. completed significant transactions affecting its ownership structure:
- Sale of 40% non-controlling interest in Copeland to Blackstone for $1.5 billion.
- Sale of a note receivable related to Copeland for $1.9 billion.
Stock Performance
As of mid-2024, Emerson Electric Co. stock (EMR) has shown a strong performance, with a year-to-date increase of approximately 15%. The stock price is currently trading around $87.50 per share.
| Date | Stock Price | Market Capitalization |
|---|---|---|
| January 1, 2024 | $76.00 | $40 billion |
| June 30, 2024 | $87.50 | $46 billion |
Conclusion on Ownership Structure
The ownership structure of Emerson Electric Co. reflects a diverse mix of institutional and retail investors, with significant institutional investment driving stability and governance. The recent transactions and stock performance indicate a robust interest in the company's future growth prospects.
Emerson Electric Co. (EMR) Mission Statement
Mission Statement Overview
The mission statement of Emerson Electric Co. emphasizes innovation, sustainability, and a commitment to customer success. The company aims to provide advanced technology and engineering solutions that improve productivity and reduce environmental impact.
Financial Performance Metrics
For the nine months ended June 30, 2024, Emerson reported significant financial metrics that reflect its operational effectiveness:
| Metric | 2023 | 2024 | Change (%) |
|---|---|---|---|
| Net Sales | $11.1 billion | $12.9 billion | +16% |
| Gross Profit | $5.4 billion | $6.5 billion | +20% |
| Operating Income | $1.9 billion | $1.3 billion | -29% |
| Net Income | $12.5 billion | $972 million | -92% |
| Diluted EPS | $21.56 | $1.69 | -92% |
Key Business Segments
Emerson operates through several key business segments, each contributing to the overall mission of enhancing productivity and sustainability:
| Segment | Net Sales (2024) | Growth (%) |
|---|---|---|
| Intelligent Devices | $8.9 billion | +5% |
| Software and Control | $4.0 billion | +51% |
| Test & Measurement | $1.1 billion | N/A (acquisition impact) |
Geographic Sales Breakdown
The geographic distribution of sales highlights Emerson's global reach and market penetration:
| Region | Net Sales (2024) | Growth (%) |
|---|---|---|
| Americas | $5.9 billion | +5% |
| Europe | $3.2 billion | +9% |
| Asia, Middle East & Africa | $3.2 billion | +9% |
Recent Acquisitions and Strategic Moves
On October 11, 2023, Emerson completed the acquisition of National Instruments Corporation (NI), now part of its Software and Control segment, enhancing its capabilities in automated testing and measurement systems. This acquisition had revenue of approximately $1.7 billion for the 12 months ended September 30, 2023.
Outlook for Fiscal 2024
Emerson expects consolidated net sales from continuing operations to increase by approximately 15% for the full year, with underlying sales projected to rise by about 6%. Earnings per share from continuing operations are anticipated to be between $2.82 and $2.87.
Commitment to Sustainability
Emerson's mission includes a strong focus on sustainability, aiming to reduce environmental impacts through innovative technologies. The company emphasizes its role in helping customers achieve their sustainability goals.
How Emerson Electric Co. (EMR) Works
Business Overview
Emerson Electric Co. operates primarily in two segments: Intelligent Devices and Software & Control. The company focuses on automation solutions and technology-driven processes to enhance operational efficiency across various industries.
Financial Performance
As of June 30, 2024, Emerson reported the following financial results:
| Metric | Q3 2023 | Q3 2024 | Change (%) |
|---|---|---|---|
| Net Sales | $3,946 million | $4,380 million | 11% |
| Gross Profit | $1,994 million | $2,314 million | 16% |
| SG&A Expenses | $1,042 million | $1,254 million | 20% |
| Earnings from Continuing Operations | $643 million | $344 million | (46%) |
| Net Earnings Common Stockholders | $9,352 million | $329 million | (96%) |
| Diluted EPS | $1.12 | $0.60 | (46%) |
Segment Performance
Intelligent Devices
For the nine months ended June 30, 2024, the Intelligent Devices segment reported:
| Sub-segment | Sales (2023) | Sales (2024) | Change (%) |
|---|---|---|---|
| Final Control | $2,889 million | $3,037 million | 5% |
| Measurement & Analytical | $2,550 million | $2,942 million | 15% |
| Discrete Automation | $1,969 million | $1,863 million | (5%) |
| Safety & Productivity | $1,034 million | $1,038 million | 0% |
| Total Intelligent Devices | $8,442 million | $8,880 million | 5% |
Software & Control
For the nine months ended June 30, 2024, the Software & Control segment reported:
| Sub-segment | Sales (2023) | Sales (2024) | Change (%) |
|---|---|---|---|
| Control Systems & Software | $1,892 million | $2,062 million | 9% |
| Test & Measurement | N/A | $1,104 million | N/A |
| AspenTech | $793 million | $878 million | 11% |
| Total Software & Control | $2,685 million | $4,044 million | 51% |
Operational Metrics
For the nine months ended June 30, 2024, Emerson's operational metrics included:
| Metric | 2023 | 2024 |
|---|---|---|
| Operating Cash Flow | $1,719 million | $2,244 million |
| Free Cash Flow | $1,525 million | $1,993 million |
| Total Debt-to-Total Capital | 28.9% | 32.7% |
| Current Ratio | 2.4 | 1.2 |
Recent Transactions
On June 6, 2024, Emerson entered definitive agreements to sell its 40% non-controlling equity interest in Copeland for $1.5 billion and its note receivable to Copeland for $1.9 billion. The company recorded a pretax loss of $279 million related to this transaction.
Outlook for Fiscal 2024
Emerson anticipates consolidated net sales from continuing operations to increase approximately 15% for the full year, with earnings per share expected between $2.82 and $2.87. Adjusted EPS is projected to be between $5.45 and $5.50.
How Emerson Electric Co. (EMR) Makes Money
Business Segments
Emerson Electric Co. operates through several segments, primarily focusing on Intelligent Devices and Software & Control. In the first nine months of 2024, the company reported net sales of $12.9 billion, a 16% increase compared to the same period in 2023. Key revenue contributions from each segment are detailed below:
| Segment | 2023 Net Sales (in millions) | 2024 Net Sales (in millions) | Change (%) |
|---|---|---|---|
| Intelligent Devices | $8,442 | $8,880 | 5% |
| Software & Control | $2,685 | $4,044 | 51% |
| Total | $11,075 | $12,873 | 16% |
Intelligent Devices Segment
The Intelligent Devices segment encompasses various product categories, contributing significantly to overall revenue. The sales performance in the first nine months of 2024 is summarized as follows:
| Category | 2023 Sales (in millions) | 2024 Sales (in millions) | Change (%) |
|---|---|---|---|
| Final Control | $2,889 | $3,037 | 5% |
| Measurement & Analytical | $2,550 | $2,942 | 15% |
| Discrete Automation | $1,969 | $1,863 | (5%) |
| Safety & Productivity | $1,034 | $1,038 | 0% |
| Total | $8,442 | $8,880 | 5% |
Software & Control Segment
This segment has seen considerable growth, particularly due to the acquisition of National Instruments in October 2023, which was integrated into the Test & Measurement category. The sales performance is as follows:
| Category | 2023 Sales (in millions) | 2024 Sales (in millions) | Change (%) |
|---|---|---|---|
| Control Systems & Software | $1,892 | $2,062 | 9% |
| Test & Measurement | $0 | $1,104 | N/A |
| AspenTech | $793 | $878 | 11% |
| Total | $2,685 | $4,044 | 51% |
Financial Performance
For the nine months ending June 30, 2024, Emerson reported the following key financial metrics:
| Measure | 2023 Amount (in millions) | 2024 Amount (in millions) | Change (%) |
|---|---|---|---|
| Gross Profit | $5,415 | $6,514 | 20% |
| SG&A Expenses | $3,072 | $3,827 | 25% |
| Earnings from Continuing Operations | $1,883 | $1,341 | (29%) |
| Net Earnings | $12,475 | $972 | (92%) |
| Diluted EPS | $21.56 | $1.69 | (92%) |
International Sales and Market Trends
In the nine months of 2024, underlying sales increased by 7%, with notable growth in international markets:
- Americas: +5%
- Europe: +9%
- Asia, Middle East & Africa: +9% (China: -2%)
Acquisitions and Divestitures
In June 2024, Emerson sold its 40% non-controlling interest in Copeland for $1.5 billion and its note receivable for $1.9 billion. This follows a significant divestiture in 2023, which positively impacted cash flow and overall financial position.
Adjusted Earnings Metrics
Emerson's adjusted diluted earnings per share for the nine months ending June 30, 2024, reflect the following:
| Metric | 2023 Amount | 2024 Amount |
|---|---|---|
| Adjusted Diluted EPS | $3.15 | $4.01 |
These figures indicate the company's focus on enhancing operational efficiency and managing costs effectively, despite challenges in certain segments.
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