Emerson Electric Co is experiencing robust demand across multiple sectors, especially in process and hybrid markets, which is propelling its order growth. Management foresees sustained strong sales in these markets throughout fiscal 2024, driven by the resilience of chemical, life sciences, LNG, metals and mining, and sustainability and decarbonization sectors.
In the Intelligent Devices segment, Emerson is observing strong performance in measurement and analytical, as well as final control businesses, supported by demand in hybrid and process markets. With optimism prevailing across its segments, Emerson anticipates a 12.5-14.5% surge in net sales for the second quarter of fiscal 2024 compared to the prior year.
Emerson is actively pursuing expansion through acquisitions. Recent acquisitions such as Afag and Flexim have bolstered its capabilities in factory automation, battery manufacturing, automotive, electronics, and automation portfolio. Additionally, the acquisition of National Instruments has strengthened its footprint in semiconductor, electronics, transportation, electric vehicles, and aerospace & defense sectors.
The company is committed to enhancing shareholder value through dividends and share repurchases. In the first quarter of fiscal 2024, it disbursed dividends totaling $300 million and repurchased common stocks worth $175 million. Furthermore, Emerson raised its dividend by 1% in October 2023.
User
However, EMR has noted a decline in performance within its test and measurement business segment under the Software and Control division. In the initial fiscal quarter, orders for this sector dropped by 17% compared to the preceding year, attributed to sustained softness in discrete and semiconductor markets, alongside continued challenges in China.
The company’s profitability has been impacted by escalating operational costs and expenditures. For example, in the first fiscal quarter, its cost of sales experienced a significant increase of 25.6% year over year, while selling, general, and administrative expenses saw a rise of 24%. Consequently, the pre-tax margin for the quarter decreased to 3.4%, down from 12.5% in the corresponding fiscal quarter of the previous year.
