Why Emerson Electric Shares Are Higher Today

Emerson Electric Co EMR shares are trading higher after the company reported first-quarter FY24 net sales growth of 22% Y/Y to $4.12 billion, beating the consensus of $3.92 billion.

Underlying sales and orders were up 10% Y/Y and 4% Y/Y, respectively.

Sales by Segments: Final Control $940 million (+9% Y/Y), Measurement & Analytical $947 million (+26% Y/Y), Discrete Automation $613 million (-1% Y/Y); Safety & Productivity $322 million (+4% Y/Y), Control Systems & Software $675 million (+11% Y/Y), AspenTech $257 million (+6% Y/Y), and Test & Measurement $382 million.

Adjusted Total Segment EBITA was $1.01 billion compared to $765 million in the prior year quarter, and the margin improved by 190 bps to 24.6%.

Adjusted EPS improved 56% Y/Y to $1.22, beating the consensus of $1.04.

Emerson’s operating cash for the quarter totaled $444 million, compared to $302 million in the prior year, and free cash flow was $367 million (+51% Y/Y).

Emerson held cash and cash equivalents of $2.08 billion as of December 31, 2023.

Dividend: Emerson declared a quarterly cash dividend per share of $0.525, payable on March 11, 2024, to stockholders of record as of February 16, 2024.

Outlook: For the second quarter, Emerson Electric expects net sales growth of 12.5%-14.5%, with underlying sales growth of 3.5%-5.5% and adjusted EPS of $1.22-$1.26 versus the consensus of $1.25. 

For FY24, Emerson Electric raised its net sales growth outlook to 14.5% -17% (prior: up 13%-15.5%), with underlying sales growth of 4.5%-6.5% (vs. 4%-6% earlier) and adjusted EPS of $5.30-$5.45 (vs. $5.15-$5.35 prior).

EMR expects an operating cash flow of $3.0 billion -$3.1 billion and an FCF of $2.6 billion-$2.7 billion for FY24.

Price Action: EMR shares are up 10.8% at $104.48 on the last check Wednesday.