Emerson Electric Co. (NYSE: EMR) fell over 1.5% on November 7th, 2017 (as of 10:07AM EST; Source: Google finance) post their fourth quarter of 2017 update.
Emerson Electric has reported the adjusted earnings per share of 83 cents in the fourth quarter of FY 17 while the group reported the adjusted revenue growth of 5 percent to $4.43 billion in the fourth quarter of FY 17. On the other hand, the hurricanes had affected Texas and Florida moderately and reduced the fourth quarter sales of both business platforms, and EMR expects to recover these sales over the next twelve months as damaged areas rebuild.
Moreover, Automation Solutions underlying sales growth has continued to trend positively in the fourth quarter, due to the improving conditions in energy-related, hybrid and general industrial markets. Growth in Commercial & Residential Solutions has moderated primarily due to the impact of cooler weather and hurricanes in the U.S., however, the favorable trends have continued in construction markets in North America and in refrigeration and air conditioning markets in Asia and Europe.
For the full year 2018, Emerson Electric expects the net sales to be up 8 to 10 percent, with underlying sales up 4 to 6 percent excluding a 4 percent impact from acquisitions, divestitures and currency translation. The adjusted net earnings per share are expected to be $2.75 to $2.95, excluding a ($0.03) impact from Valves & Controls first year acquisition accounting charges related to inventory and backlog amortization, and a ($0.06) impact from a tax-related loss on the divestiture of the ClosetMaid business, which occurred early in the first quarter of FY18. As a result of the divestiture, the company expects the first quarter tax rate is to be approximately 40 percent.
For FY 18, Emerson Electric expects the oil and gas prices to remain stable in a range favorable for energy-related markets, and the growth in air conditioning, refrigeration, and global construction markets is expected to continue. Automation Solutions net sales are expected to be up 14 to 16 percent, with underlying sales up 5 to 7 percent excluding an impact from acquisitions and currency translation of 9 percent. Commercial & Residential Solutions net sales are expected to be down 1 percent to up 1 percent and underlying sales are expected to be up 3 to 5 percent excluding the impact of the ClosetMaid divestiture and currency translation of 4 percent.