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Dec 31, 2020
Emerson Q1 2021 Earnings Report
Emerson's first quarter results for 2021 were reported, with revenue ahead of management's guidance and strong profitability driven by cost containment and restructuring actions.
Key Takeaways
Emerson reported flat net sales of $4.2 billion, but underlying sales were down 2 percent, ahead of guidance. GAAP EPS was $0.74, up 40 percent, and adjusted EPS was $0.83, up 24 percent. The company saw strong operating cash flow of $808 million, up 90 percent, and free cash flow of $686 million, up 121 percent.
GAAP net sales of $4.2 billion were flat year-over-year, while underlying sales decreased by 2 percent, exceeding management's November guidance.
GAAP EPS increased by 40 percent to $0.74, and adjusted EPS rose by 24 percent to $0.83.
Operating cash flow increased by 90 percent to $808 million, and free cash flow increased by 121 percent to $686 million.
Restructuring actions of $69 million were initiated to improve adjusted EBIT margins.
Forward Guidance
Emerson expects a slow but steady improvement in industrial demand over the course of 2021, with robust residential demand. Underlying revenue is expected to be positive for the full year. Total company restructuring spend is planned at approximately $200 million for the full year. The guidance assumes no major operational or supply chain disruptions and oil prices in the $45 to $55 range.
Positive Outlook
- Net Sales Growth 4% - 8%
- Automation Solutions 2% - 6%
- Commercial & Residential Solutions 10% - 12%
- GAAP EPS $3.39 +/- $.10
- Adjusted EPS $3.70 +/- $.10
Challenges Ahead
- Underlying Sales Growth flat - 4%
- Automation Solutions (3%) - 1%
- Commercial & Residential Solutions 8% - 10%
- Restructuring Actions ~$200M / M&A (excl. OSI)1
Historical Earnings Impact
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Avg. Return Before/After Earnings
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