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Dec 31, 2019
Emerson Q1 2020 Earnings Report
Emerson's first quarter 2020 results were reported with flat net sales and in-line adjusted EPS.
Key Takeaways
Emerson reported flat net sales of $4.2 billion in the first quarter of 2020. Adjusted EPS was $0.67, in line with management's guidance. The company initiated $97 million of restructuring actions and delivered operating cash flow of $424 million and free cash flow of $310 million.
Net sales were flat at $4.2 billion; underlying sales were also flat.
GAAP EPS was $0.53; adjusted EPS of $0.67 was in-line with guidance.
Operating cash flow increased to $424 million, and free cash flow rose to $310 million.
The company initiated $97 million of restructuring actions during the quarter.
Forward Guidance
Management has updated the fiscal year 2020 outlook to reflect the expected costs and benefits of full year restructuring plans. Adjusted earnings per share, which excludes approximately $215 million of planned restructuring actions and $13 million of related costs for the year, is $3.55 to $3.80 compared to prior guidance of $3.48 to $3.72.
Positive Outlook
- Full year 2020 sales guidance reiterated.
- Full year EPS guidance updated for planned restructuring actions and associated benefits.
- Adjusted earnings per share guidance raised due to expected savings from restructuring actions.
- Board of Directors has largely completed its review of operational, capital allocation and portfolio initiatives.
- Teams have worked hard to initiate nearly $100 million of restructuring in the quarter.
Challenges Ahead
- Challenging economic environment expected for the remainder of fiscal 2020.
- Broad-based corporate focus on cost cutting is expected.
- The U.S. presidential election is expected to pressure industrial markets.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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