Emerson: Doing It The Hard Way
By Stephen Simpson:This has been a decidedly mixed quarter for industrial companies, made perhaps slightly more tolerable by consistent management guidance earlier this year that it would be a challenging quarter. That said, Emerson (EMR) has been on a concerning streak of late with uninspiring quarterly performance (relative to expectations) and low order growth. Although management has remained rather consistent in tone and substance, Emerson's shortfalls are increasing turning it into a "show me" story with investors.
A Pretty Mediocre Fiscal Second Quarter
Emerson delivered a quarter that it puts on the lower rung of industrial companies this quarter. Revenue rose just 1% as reported (up 2% organically), and the only significant growth came from the process management division (up 13%). Industrial automation was surprisingly weak, network power remains uninspiring, and climate continues to look for a bottom.Operating performance was arguably even more disappointing. Gross margin was alright, but operating incomeComplete Story »
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