Emerson Electric Co.
Summary
- Emerson Electric Co. is a global technology and engineering company.
- Emerson designs and manufactures products and provides solutions for industrial, commercial and consumer markets.
- Recently Emerson National Instruments.
Emerson Electric Co. (NYSE: EMR, LSE:0R33) is a global technology and engineering company. Emerson designs and manufactures products and delivers services that bring technology and engineering together to provide solutions for industrial, commercial and consumer markets.
Recent Developments
Emerson Ventures Invests in NevadaNano1
Feb. 7, 2023; Emerson has made an investment through Emerson Ventures, its corporate venture capital arm, joining NevadaNano’s financing round to speed development of the company’s new emissions-tracking technology.
NevadaNano is known internationally for designing and manufacturing hardware-enabled SaaS solutions and sensor technologies that detect methane emissions, hydrogen emissions, and flammable gas emissions. NevadaNano has become a critical leader in greenhouse gas abatement across numerous industries. As part of its commitment to sustainability, the company also produces refrigerant sensors that detect harmful emissions in air conditioning and refrigeration applications. The Series C investment will extend NevadaNano’s suite of sensors and expand its line of emissions-tracking products, including MethaneTrack™, GHGTrack™, and RefrigerantTrack™.
NevadaNano’s experience in sensor technology and portfolio of 30 patents enables solutions that monitor emissions for years, maintenance-free, with the lowest total cost of ownership. Its “always on” methane emissions-tracking system provides a low-cost, automated, and continuous measurement for various systems and technologies.
Honeywell Ventures is the venture arm of Honeywell that invests in disruptive technology companies that accelerate the commercialization of critical breakthroughs in IoT sensing, predictive analytics, and decarbonization solutions.
Emerson will acquire National Instruments.2
April 12, 2023; Emerson and NI announced that they have entered into a definitive agreement under which Emerson will acquire NI for $60 per share in cash at an equity value of $8.2 billion. Emerson already owns approximately 2.3 million shares of NI, representing approximately 2% of shares outstanding, which were acquired at a weighted average price of $36.84. As a result, Emerson’s effective per share purchase price is $59.61.
NI provides software-connected automated test and measurement systems that enable enterprises to bring products to market faster and at a lower cost. NI’s solutions help customers solve current and future test challenges and improve speed and efficiency in their product development cycles. NI had $1.66 billion in 2022 revenue and operates in more than 40 countries, serving approximately 35,000 customers across semiconductor and electronics, transportation, and aerospace and defense markets.
Financial Highlights
First Quarter 2023 Results3
Feb. 8, 2023; Emerson reported results for its first quarter ended December 31, 2022
- Net sales were $3.4 billion, up 7 percent from the year prior; underlying sales were up 6 percent
- Strong operational performance to start 2023 offset by foreign exchange and stock compensation headwinds
- GAAP EPS was $0.56; adjusted EPS was $0.78, including $0.09 unfavorable impact from stock compensation
- Completed $2 billion of share repurchase in the first quarter
- Updated 2023 full year net sales and GAAP EPS outlook; maintained underlying sales and adjusted EPS outlook despite stock compensation headwind
- Announced St. Louis selected as global headquarters
- Declared quarterly cash dividend of $0.52 per share of common stock payable March 10, 2023 to stockholders of record February 17, 2023
- Underlying orderswere up 5 percent. Net sales were up 7 percent for the quarter and underlying sales were up 6 percent. The Americas were up 13 percent, Europe was down 2 percent, and Asia, Middle East & Africa was flat.
Pretax margin was 12.5 percent for the quarter, down 1730 basis points. Adjusted segment EBITA margin was 22.7 percent, up 130 basis points.
Earnings per share were $0.56 for the quarter, down 55 percent. Earnings per share growth was impacted by a prior year gain of $0.60 related to its Vertiv subordinated interest. Adjusted earnings per share were $0.78, down 1 percent. The quarter was unfavorably impacted by $0.09 due to a 31 percent increase in the company stock price in the quarter and resulting impact on mark-to-market stock compensation plans.
Operating cash flow was $302 million for the quarter, down 20 percent, and free cash flow was $243 million, down 20 percent. Cash flow results reflected higher working capital versus prior year.
Full Year 2022 Result
Net sales for the Years ended September 30, 2022 were $19.6 billion, an increase of $1.4 billion, or 8 percent compared with 2021. Sales increased $466 in Automation Solutions, $337 in AspenTech and $580 in Commercial & Residential Solutions. Underlying sales, which exclude foreign currency translation, acquisitions and divestitures, increased 9 percent on 4 percent higher volume and 5 percent higher price. The AspenTech acquisition added 2 percent, foreign currency translation deducted 2 percent and the Therm-O-Disc divestiture deducted 1 percent. Underlying sales increased 14 percent in the U.S. and 6 percent internationally.
Cost of sales for 2022 were $11,441, an increase of $768 compared with $10,673 in 2021. SG&A expenses of $4,248 in 2022 increased $69 compared with 2021. Pretax earnings of $4,085 increased $1,173 in 2022, up 40 percent compared with 2021
Net earnings common stockholders were $3,231 in 2022, up 40 percent compared with prior year earnings of $2,303, and diluted earnings per share were $5.41, up 42 percent versus $3.82 per share in 2021. Adjusted diluted earnings per share were $5.25 compared with $4.51 in the prior year, reflecting strong operating results and a $0.12 benefit related to the AspenTech acquisition.
The Company generated operating cash flow of $2.9 billion in 2022, a decrease of $653, or 18 percent, reflecting higher working capital due to increased sales and continued supply chain constraints.
Company Overview
Emerson Electric Co. is a global technology and engineering company. Emerson designs and manufactures products and delivers services that bring technology and engineering together to provide solutions for industrial, commercial and consumer markets.4
Sales by geographic destination in 2022 were: the Americas, 56 percent; Asia, Middle East & Africa, 28 percent (China, 12 percent); and Europe, 16 percent.
The Company sells products and solutions that support customers in a variety of end markets. Overall, sales by end market were as follows: Commercial, 19 percent; residential, 16 percent; energy, 15 percent; chemical, 10 percent; power & renewables, 9 percent; general industries, 9 percent; discrete, 8 percent; hybrid, 6 percent; other, 8 percent.
Automation Solutions
The Automation Solutions segment offers a broad array of products, integrated solutions, software and services which enable process, hybrid and discrete manufacturers to maximize production, protect personnel and the environment, reduce project costs, and optimize their energy efficiency and operating costs. Markets served include energy, chemical, power & renewables, life sciences, food and beverage, automotive, pulp and paper, metals and mining, and municipal water supplies. The segment’s major product offerings are Measurement & Analytical Instrumentation, Valves, Actuators & Regulators, Industrial Solutions and Systems & Software.
Service/trademarks and trade names Automation Solutions include Emerson Automation Solutions, Appleton, ASCO, Aventics, Bettis, Branson, DeltaV, Fisher, Keystone, KTM, Micro Motion, Monarch, Ovation, Plantweb, Rosemount and Vanessa.
AspenTech
AspenTech is a global leader in asset optimization software that enables industrial manufacturers to design, operate, and maintain their operations for maximum performance. AspenTech combines decades of modeling, simulation, and optimization capabilities with industrial operations expertise and applies advanced analytics to improve the profitability and sustainability of production assets.
Commercial & Residential Solutions
The Commercial & Residential Solutions business consists of the Climate Technologies and Tools & Home Products segments, and provides products and solutions that promote energy efficiency and sustainability, enhance household and commercial comfort, and protect food quality and sustainability through heating, air conditioning and refrigeration technology, as well as a broad range of tools and appliance solutions.
Tools & Home Products
The Company’s Tools & Home Products segment offers tools for professionals and homeowners that promote safety and productivity.
Service/trademarks and trade names within the Tools & Home Products segment include Emerson, Emerson Professional Tools, Greenlee, Klauke, ProTeam and RIDGID.
Company History
Emerson was founded in 1890 in St. Louis, Missouri, as a manufacturer of electric motors and fans.5
| Year | Milestone |
| 1890 | Emerson Electric Manufacturing Company is founded by John Wesley Emerson in St. Louis, Missouri. The company produces electric motors and fans. |
| 1892 | The company's first major breakthrough comes with the development of the "Emerson ceiling fan," which quickly becomes a popular household appliance. |
| 1912 | Emerson begins producing electric refrigeration units for commercial use. |
| 1920s | Emerson expands its product line to include radio sets and other consumer electronics. |
| 1954 | Emerson enters the air conditioning and heating market with the acquisition of the Copeland Corporation. |
| 1971 | The company is renamed Emerson Electric Co. to reflect its growing range of products and services. |
| 1986 | Emerson acquires the Fisher Controls Company, a leading manufacturer of control valves and instrumentation for the process industries. |
| 1990s | Emerson expands its presence in the international market with the acquisition of several European and Asian companies. |
| 2000s | Emerson focuses on building its expertise in automation and control technologies, acquiring companies such as GE Automation Services and Avocent. |
| 2010s | Emerson divests its network power division and acquires companies such as Cooper Industries and Pentair Valves and Controls to strengthen its position in the energy and industrial markets. |
| 2020 | Emerson announces plans to spin off its automation solutions business, which will become a separate publicly traded company. |
References
- ^ https://www.emerson.com/en-us/news/2023/emerson-ventures-invests-nevadanano
- ^ https://www.emerson.com/en-us/news/2023/04-emerson-ni-acquisition
- ^ https://www.emerson.com/en-us/news/2023/emerson-first-quarter-2023-results
- ^ https://fintel.io/doc/sec-emerson-electric-co-32604-10k-2022-november-14-19311-1591
- ^ https://www.emerson.com/en-in/about-us/company-history
