Emerson Reports Fourth Quarter and Full Year 2024 Results; Provides Initial 2025 Outlook
ST. LOUIS, Nov. 5, 2024 /PRNewswire/ -- Emerson (NYSE:EMR) today reported results1 for its fourth quarter and fiscal year ended September 30, 2024. Emerson also declared a quarterly cash dividend increase to $0.5275 per share of common stock payable December 10, 2024 to stockholders of record November 15, 2024.
(dollars in millions, except per share)
2023 Q4
2024 Q4
Change
2023
2024
Change
Underlying Orders2
2 %
2 %
Net Sales
$4,090
$4,619
13 %
$15,165
$17,492
15 %
Underlying Sales3
4 %
6 %
Pretax Earnings
$1,020
$679
$2,903
$2,020
Margin
24.9 %
14.7 %
(1020) bps
19.1 %
11.5 %
(760) bps
Adjusted Segment EBITA4
$1,045
$1,210
$3,794
$4,552
Margin
25.5 %
26.2 %
70 bps
25.0 %
26.0 %
100 bps
GAAP Earnings Per Share
$1.36
$0.97
(29) %
$3.96
$2.82
(29) %
Adjusted Earnings Per Share5
$1.29
$1.48
15 %
$4.44
$5.49
24 %
Operating Cash Flow
$991
$1,073
8 %
$2,710
$3,317
22 %
Free Cash Flow
$822
$905
10 %
$2,347
$2,898
23 %
Management Commentary
"Emerson completed an outstanding fiscal 2024, with strong underlying sales growth, operating leverage, adjusted earnings per share and cash generation. I want to thank our employees around the world for their commitment and passion which were integral to delivering these results," said Emerson President and Chief Executive Officer Lal Karsanbhai. "We have done an exceptional job integrating Test & Measurement with $100 million of synergies realized in the first year, and we remain resolute in our focus on executing at a world-class level, guided by our Emerson Management System. Emerson's leading technology, alignment with secular trends and customer focus provide confidence for continued momentum in fiscal 2025."
Karsanbhai continued, "We have made significant progress on our value-creation roadmap over the past three years, and the strategic actions announced today mark the final phase of our portfolio transformation to an industrial technology leader delivering advanced automation solutions. The actions we are taking, combined with our solid fiscal 2024 financial results, demonstrate the benefits and potential of Emerson's higher growth and higher margin portfolio. We are energized to complete our transformation and continue creating value for shareholders over the near- and long-term."
2025 Outlook
The following tables summarize the fiscal year 2025 guidance framework and does not include any impact from the proposed portfolio transactions announced today. The 2025 outlook assumes approximately $1.2 billion of dividend payments. Guidance figures are approximate.
2025 Q1
2025
Net Sales Growth
2.5% - 3.5%
3.5% - 5.5%
Underlying Sales Growth
2% - 3%
3% - 5%
Earnings Per Share
$0.89 - $0.94
$4.42 - $4.62
Amortization of Intangibles
~$0.31
~$1.23
Restructuring / Related Costs
~$0.04
~$0.16
Acquisition / Divestiture Fees and Related Costs
~$0.01
~$0.04
Adjusted Earnings Per Share
$1.25 - $1.30
$5.85 - $6.05
Operating Cash Flow
$3.6B - $3.7B
Free Cash Flow
$3.2B - $3.3B
Share Repurchase
~$1.0B
~$2.0B
1 Results are presented on a continuing operations basis.
2 Underlying orders do not include AspenTech.
3 Underlying sales exclude the impact of currency translation, and significant acquisitions and divestitures.
4 Adjusted segment EBITA represents segment earnings excluding 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 taxes, an AspenTech Micromine purchase price hedge and write-offs associated with Emerson's Russia exit.
Conference Call
Today, beginning at 7:00 a.m. Central Time / 8:00 a.m. Eastern Time, Emerson management will discuss the fourth quarter and fiscal year 2024 results, as well as the strategic actions announced in a separate press release this morning, 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.
Contacts
Investors:
Media:
Colleen Mettler
Joseph Sala / Greg Klassen / Connor Murphy
(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
September 30,
Year Ended
September 30,
2023
2024
2023
2024
Net sales
$ 4,090
$ 4,619
$ 15,165
$ 17,492
Costs and expenses:
Cost of sales
2,078
2,248
7,738
8,607
SG&A expenses
1,114
1,315
4,186
5,142
Gain on subordinated interest
(161)
—
(161)
(79)
Loss on Copeland note receivable
—
—
—
279
Other deductions, net
147
359
506
1,434
Interest expense (income), net
(77)
18
34
175
Interest income from related party1
(31)
—
(41)
(86)
Earnings from continuing operations before income taxes
1,020
679
2,903
2,020
Income taxes
242
149
642
415
Earnings from continuing operations
778
530
2,261
1,605
Discontinued operations, net of tax
(40)
438
10,939
350
Net earnings
738
968
13,200
1,955
Less: Noncontrolling interests in subsidiaries
(6)
(28)
(19)
(13)
Net earnings common stockholders
$ 744
$ 996
$ 13,219
$ 1,968
Earnings common stockholders
Earnings from continuing operations
$ 784
$ 558
$ 2,286
$ 1,618
Discontinued operations
(40)
438
10,933
350
Net earnings common stockholders
$ 744
$ 996
$ 13,219
$ 1,968
Diluted avg. shares outstanding
574.7
573.9
577.3
574.0
Diluted earnings per share common stockholders
Earnings from continuing operations
$ 1.36
$ 0.97
$ 3.96
$ 2.82
Discontinued operations
(0.07)
0.76
18.92
0.61
Diluted earnings per common share
$ 1.29
$ 1.73
$ 22.88
$ 3.43
Quarter Ended
September 30,
Year Ended
September 30,
2023
2024
2023
2024
Other deductions, net
Amortization of intangibles
$ 125
$ 266
$ 482
$ 1,077
Restructuring costs
31
58
72
228
Other
(9)
35
(48)
129
Total
$ 147
$ 359
$ 506
$ 1,434
1 Represents interest on the Copeland note receivable.
Table 2
EMERSON AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN MILLIONS, UNAUDITED)
Year Ended Sept 30
2023
2024
Assets
Cash and equivalents
$ 8,051
$ 3,588
Receivables, net
2,518
2,927
Inventories
2,006
2,180
Other current assets
1,244
1,497
Total current assets
13,819
10,192
Property, plant & equipment, net
2,363
2,807
Goodwill
14,480
18,067
Other intangible assets
6,263
10,436
Copeland note receivable and equity investment held-for-sale
3,255
—
Other
2,566
2,744
Total assets
$ 42,746
$ 44,246
Liabilities and equity
Short-term borrowings and current
maturities of long-term debt
$ 547
$ 532
Accounts payable
1,275
1,335
Accrued expenses
3,210
3,875
Total current liabilities
5,032
5,742
Long-term debt
7,610
7,155
Other liabilities
3,506
3,840
Equity
Common stockholders' equity
20,689
21,636
Noncontrolling interests in subsidiaries
5,909
5,873
Total equity
26,598
27,509
Total liabilities and equity
$ 42,746
$ 44,246
Table 3
EMERSON AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN MILLIONS, UNAUDITED)
Year Ended Sept 30
2023
2024
Operating activities
Net earnings
$ 13,200
$ 1,955
Earnings from discontinued operations, net of tax
(10,939)
(350)
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization
1,051
1,689
Stock compensation
250
260
Amortization of acquisition-related inventory step-up
—
231
Pension expense
(71)
(79)
Pension funding
(43)
(38)
Changes in operating working capital
(148)
(151)
Gain on subordinated interest
(161)
(79)
Loss on Copeland note receivable
—
279
Other, net
(429)
(400)
Cash from continuing operations
2,710
3,317
Cash from discontinued operations
(2,073)
15
Cash provided by operating activities
637
3,332
Investing activities
Capital expenditures
(363)
(419)
Purchases of businesses, net of cash and equivalents acquired
(705)
(8,342)
Proceeds from subordinated interest
176
79
Proceeds from related party note receivable
918
—
Other, net
(141)
(114)
Cash from continuing operations
(115)
(8,796)
Cash from discontinued operations
12,530
3,436
Cash provided by (used in) investing activities
12,415
(5,360)
Financing activities
Net increase (decrease) in short-term borrowings
(1,578)
(15)
Proceeds from short-term borrowings greater than three months
395
322
Payments of short-term borrowings greater than three months
(400)
(327)
Payments of long-term debt
(741)
(547)
Dividends paid
(1,198)
(1,201)
Purchases of common stock
(2,000)
(435)
AspenTech purchases of common stock
(214)
(208)
Payment of related party note payable
(918)
—
Other, net
(169)
(44)
Cash provided by (used in) financing activities
(6,823)
(2,455)
Effect of exchange rate changes on cash and equivalents
18
20
Increase (Decrease) in cash and equivalents
6,247
(4,463)
Beginning cash and equivalents
1,804
8,051
Ending cash and equivalents
$ 8,051
$ 3,588
Table 4
EMERSON AND SUBSIDIARIES
SEGMENT SALES AND EARNINGS
(AMOUNTS 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 Sept 30
2023
2024
Reported
Underlying
Sales
Final Control
$ 1,081
$ 1,167
8 %
7 %
Measurement & Analytical
1,045
1,119
7 %
7 %
Discrete Automation
666
643
(3) %
(4) %
Safety & Productivity
354
352
(1) %
(1) %
Intelligent Devices
$ 3,146
$ 3,281
4 %
4 %
Control Systems & Software
714
780
9 %
9 %
Test & Measurement
—
360
AspenTech
249
215
(13) %
(13) %
Software and Control
$ 963
$ 1,355
41 %
3 %
Eliminations
(19)
(17)
Total
$ 4,090
$ 4,619
13 %
4 %
Sales Growth by Geography
Quarter Ended
Sept 30
Americas
4 %
Europe
— %
Asia, Middle East & Africa
6 %
Table 4 cont.
Year Ended Sept 30
2023
2024
Reported
Underlying
Sales
Final Control
$ 3,970
$ 4,204
6 %
6 %
Measurement & Analytical
3,595
4,061
13 %
14 %
Discrete Automation
2,635
2,506
(5) %
(5) %
Safety & Productivity
1,388
1,390
— %
— %
Intelligent Devices
$ 11,588
$ 12,161
5 %
5 %
Control Systems & Software
2,606
2,842
9 %
10 %
Test & Measurement
—
1,464
AspenTech
1,042
1,093
5 %
5 %
Software and Control
$ 3,648
$ 5,399
48 %
8 %
Eliminations
(71)
(68)
Total
$ 15,165
$ 17,492
15 %
6 %
Sales Growth by Geography
Year Ended Sept
30
Americas
4 %
Europe
7 %
Asia, Middle East & Africa
8 %
Table 4 cont.
Quarter Ended Sept 30
