Emerson Reports Third Quarter 2024 Results; Updates 2024 Outlook
(dollars in millions, except per share) |
|
2023 Q3 |
2024 Q3 |
Change |
|
Underlying Orders2 |
|
|
|
3 % |
|
|
|
|
|
11 % |
|
Underlying Sales3 |
|
|
|
3 % |
|
Pretax Earnings |
|
|
|
|
|
Margin |
|
20.8 % |
10.4 % |
(1040) bps |
|
Adjusted Segment EBITA4 |
|
|
|
|
|
Margin |
|
26.9 % |
27.1 % |
20 bps |
|
GAAP Earnings Per Share |
|
|
|
(46) % |
|
Adjusted Earnings Per Share5 |
|
|
|
11 % |
|
Operating Cash Flow |
|
|
|
27 % |
|
Free Cash Flow |
|
|
|
27 % |
|
Management Commentary
"Emerson delivered another strong quarter, with solid underlying orders growth and with profitability and cash flow both exceeding expectations," said Emerson President and Chief Executive Officer Lal Karsanbhai. "Demand in process and hybrid markets, led by a constructive capex cycle, continues to meet expectations. Our operating leverage performance demonstrates the benefits of our highly differentiated technology and world-class Emerson Management System, giving us the confidence to execute on our plan for 2024."
Karsanbhai continued, "In the quarter, we also took another important step to simplify our portfolio and enhance our focus as a global leader in automation with the definitive agreement to completely exit the Copeland business. Emerson is creating value for our shareholders as we execute with our higher growth and higher margin automation portfolio."
2024 Outlook
The following tables summarize the fiscal year 2024 guidance framework for continuing operations6. The 2024 outlook assumes approximately
|
|
2024 |
Net Sales Growth |
|
~15% |
Underlying Sales Growth |
|
~6% |
Earnings Per Share |
|
|
Amortization of Intangibles |
|
|
Restructuring and Related Costs |
|
|
Loss on Copeland Note Receivable |
|
|
Amortization of Acquisition-related Inventory Step-up |
|
|
Acquisition / Divestiture Fees and Related Costs |
|
|
Divestiture Loss / (Gain), net |
|
( |
Discrete Tax Benefits |
|
( |
Adjusted Earnings Per Share |
|
|
Operating Cash Flow |
|
|
Free Cash Flow |
|
|
|
1 Results are presented on a continuing operations basis. |
2 Underlying orders does not include |
3 Underlying sales excludes the impact of currency translation, and significant acquisitions and divestitures. |
4 Adjusted segment EBITA represents segment earnings less restructuring and intangibles amortization expense. |
5 Adjusted EPS excludes intangibles amortization expense, restructuring and related costs, the amortization of acquisition-related inventory step-up, acquisition/divestiture gains, losses, fees and related costs, discrete tax benefits, an AspenTech Micromine purchase price hedge and write-offs associated with Emerson's |
6 With the |
Copeland Transaction Update
As of
Conference Call
Today, beginning at
About Emerson
Emerson (NYSE: EMR) is a global technology and software company providing innovative solutions for the world's essential industries. Through its leading automation portfolio, including its majority stake in
Forward-Looking and Cautionary Statements
Statements in this press release that are not strictly historical may be "forward-looking" statements, which involve risks and uncertainties, and Emerson undertakes no obligation to update any such statements to reflect later developments. These risks and uncertainties include the scope, duration and ultimate impacts of the
Emerson uses our Investor Relations website, www.Emerson.com/investors, as a means of disclosing information which may be of interest or material to our investors and for complying with disclosure obligations under Regulation FD. Accordingly, investors should monitor our Investor Relations website, in addition to following our press releases,
Investors: |
Media: |
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(314) 553-2197 |
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(212) 355-4449 |
(tables attached)
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Table 1 |
EMERSON AND SUBSIDIARIES |
|||||||
CONSOLIDATED OPERATING RESULTS |
|||||||
(AMOUNTS IN MILLIONS EXCEPT PER SHARE, UNAUDITED) |
|||||||
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Nine Months Ended |
||||
|
|
||||||
|
2023 |
|
2024 |
|
2023 |
|
2024 |
|
|
|
|
|
|
|
|
Net sales |
$ 3,946 |
|
$ 4,380 |
|
|
|
|
Cost of sales |
1,952 |
|
2,066 |
|
5,660 |
|
6,359 |
SG&A expenses |
1,042 |
|
1,254 |
|
3,072 |
|
3,827 |
Gain on subordinated interest |
— |
|
— |
|
— |
|
(79) |
Loss on Copeland note receivable |
— |
|
279 |
|
— |
|
279 |
Other deductions, net |
130 |
|
294 |
|
359 |
|
1,075 |
Interest expense, net |
10 |
|
56 |
|
111 |
|
157 |
Interest income from related party1 |
(10) |
|
(24) |
|
(10) |
|
(86) |
Earnings from continuing operations before income taxes |
822 |
|
455 |
|
1,883 |
|
1,341 |
Income taxes |
168 |
|
88 |
|
400 |
|
266 |
Earnings from continuing operations |
654 |
|
367 |
|
1,483 |
|
1,075 |
Discontinued operations, net of tax |
8,712 |
|
(15) |
|
10,979 |
|
(88) |
Net earnings |
9,366 |
|
352 |
|
12,462 |
|
987 |
Less: Noncontrolling interests in subsidiaries |
14 |
|
23 |
|
(13) |
|
15 |
Net earnings common stockholders |
$ 9,352 |
|
$ 329 |
|
|
|
$ 972 |
|
|
|
|
|
|
|
|
Earnings common stockholders |
|
|
|
|
|
|
|
Earnings from continuing operations |
$ 643 |
|
$ 344 |
|
$ 1,502 |
|
$ 1,060 |
Discontinued operations |
8,709 |
|
(15) |
|
10,973 |
|
(88) |
Net earnings common stockholders |
$ 9,352 |
|
$ 329 |
|
|
|
$ 972 |
|
|
|
|
|
|
|
|
Diluted avg. shares outstanding |
574.0 |
|
574.8 |
|
578.1 |
|
574.1 |
|
|
|
|
|
|
|
|
Diluted earnings per share common stockholders |
|
|
|
|
|
|
|
Earnings from continuing operations |
|
|
|
|
|
|
|
Discontinued operations |
15.16 |
|
(0.03) |
|
18.96 |
|
(0.15) |
Diluted earnings per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Nine Months Ended |
||||
|
|
||||||
|
2023 |
|
2024 |
|
2023 |
|
2024 |
Other deductions, net |
|
|
|
|
|
|
|
Amortization of intangibles |
|
|
|
|
|
|
|
Restructuring costs |
12 |
|
57 |
|
41 |
|
170 |
Other |
(2) |
|
(27) |
|
(39) |
|
94 |
Total |
|
|
|
|
|
|
|
|
1 Represents interest on the Copeland note receivable through |
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|
Table 2 |
EMERSON AND SUBSIDIARIES |
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CONSOLIDATED BALANCE SHEETS |
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(DOLLARS IN MILLIONS, UNAUDITED) |
|||
|
|
|
|
|
|
|
|
Assets |
|
|
|
Cash and equivalents |
$ 8,051 |
|
$ 2,298 |
Receivables, net |
2,518 |
|
2,761 |
Inventories |
2,006 |
|
2,303 |
Other current assets |
1,244 |
|
1,458 |
Total current assets |
13,819 |
|
8,820 |
Property, plant & equipment, net |
2,363 |
|
2,688 |
|
14,480 |
|
17,936 |
Other intangible assets |
6,263 |
|
10,627 |
Copeland note receivable and equity investment held-for-sale |
3,255 |
|
2,908 |
Other |
2,566 |
|
2,606 |
Total assets |
$ 42,746 |
|
$ 45,585 |
|
|
|
|
Liabilities and equity |
|
|
|
Short-term borrowings and current maturities of long-term debt |
$ 547 |
|
$ 2,991 |
Accounts payable |
1,275 |
|
1,251 |
Accrued expenses |
3,210 |
|
3,350 |
Total current liabilities |
5,032 |
|
7,592 |
Long-term debt |
7,610 |
|
7,111 |
Other liabilities |
3,506 |
|
4,194 |
Equity |
|
|
|
Common stockholders' equity |
20,689 |
|
20,799 |
Noncontrolling interests in subsidiaries |
5,909 |
|
5,889 |
Total equity |
26,598 |
|
26,688 |
Total liabilities and equity |
$ 42,746 |
|
$ 45,585 |
|
|
|
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Table 3 |
EMERSON AND SUBSIDIARIES |
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CONSOLIDATED STATEMENTS OF CASH FLOWS |
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(DOLLARS IN MILLIONS, UNAUDITED) |
||||
|
|
|
|
|
|
Nine Months Ended |
|||
|
|
2023 |
|
2024 |
Operating activities |
|
|
|
|
Net earnings |
|
$ 12,462 |
|
$ 987 |
Earnings from discontinued operations, net of tax |
|
(10,979) |
|
88 |
Adjustments to reconcile net earnings to net cash provided by operating activities: |
|
|
|
|
Depreciation and amortization |
|
780 |
|
1,263 |
Stock compensation |
|
198 |
|
203 |
Amortization of acquisition-related inventory step-up |
|
— |
|
231 |
Gain on subordinated interest |
|
— |
|
(79) |
Loss on Copeland note receivable |
|
— |
|
279 |
Changes in operating working capital |
|
(359) |
|
(176) |
Other, net |
|
(383) |
|
(552) |
Cash from continuing operations |
|
1,719 |
|
2,244 |
Cash from discontinued operations |
|
(439) |
|
4 |
Cash provided by operating activities |
|
1,280 |
|
2,248 |
|
|
|
|
|
Investing activities |
|
|
|
|
Capital expenditures |
|
(194) |
|
(251) |
Purchases of businesses, net of cash and equivalents acquired |
|
— |
|
(8,342) |
Proceeds from subordinated interest |
|
15 |
|
79 |
Proceeds from related party note receivable |
|
918 |
|
— |
Other, net |
|
(124) |
|
(86) |
Cash from continuing operations |
|
615 |
|
(8,600) |
Cash from discontinued operations |
|
12,485 |
|
36 |
Cash provided by (used in) investing activities |
|
13,100 |
|
(8,564) |
|
|
|
|
|
Financing activities |
|
|
|
|
Net increase (decrease) in short-term borrowings |
|
(1,476) |
|
2,229 |
Proceeds from short-term borrowings greater than three months |
|
395 |
|
322 |
Payments of short-term borrowings greater than three months |
|
(400) |
|
(100) |
Payments of long-term debt |
|
(744) |
|
(547) |
Dividends paid |
|
(900) |
|
(901) |
Purchases of common stock |
|
(2,000) |
|
(175) |
|
|
(100) |
|
(188) |
Payment of related party note payable |
|
(918) |
|
— |
Other, net |
|
(159) |
|
(57) |
Cash provided by (used in) financing activities |
|
(6,302) |
|
583 |
|
|
|
|
|
Effect of exchange rate changes on cash and equivalents |
|
75 |
|
(20) |
Increase (decrease) in cash and equivalents |
|
8,153 |
|
(5,753) |
Beginning cash and equivalents |
|
1,804 |
|
8,051 |
Ending cash and equivalents |
|
$ 9,957 |
|
$ 2,298 |
Table 4 |
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EMERSON AND SUBSIDIARIES SEGMENT SALES AND EARNINGS (DOLLARS IN MILLIONS, UNAUDITED) |
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The following tables show results for the Company's segments on an adjusted segment EBITA basis and are intended to |
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Quarter Ended |
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|
2023 |
|
2024 |
|
Reported |
|
Underlying |
Sales |
|
|
|
|
|
|
|
Final Control |
$ 1,035 |
|
$ 1,046 |
|
1 % |
|
2 % |
Measurement & Analytical |
913 |
|
982 |
|
8 % |
|
9 % |
Discrete Automation |
668 |
|
618 |
|
(8) % |
|
(6) % |
Safety & Productivity |
363 |
|
351 |
|
(3) % |
|
(3) % |
Intelligent Devices |
$ 2,979 |
|
$ 2,997 |
|
1 % |
|
2 % |
|
|
|
|
|
|
|
|
Control Systems & Software |
663 |
|
700 |
|
6 % |
|
7 % |
Test & Measurement |
— |
|
355 |
|
|
|
|
|
320 |
|
343 |
|
7 % |
|
7 % |
Software and Control |
$ 983 |
|
$ 1,398 |
|
42 % |
|
7 % |
|
|
|
|
|
|
|
|
Eliminations |
(16) |
|
(15) |
|
|
|
|
Total |
$ 3,946 |
|
$ 4,380 |
|
11 % |
|
3 % |
|
|
|
|
|
|
||
Sales Growth by Geography |
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|
|
|
|
||
|
Quarter Ended |
|
|
|
|
||
|
3 % |
|
|
|
|
|
|
|
4 % |
|
|
|
|
|
|
|
2 % |
|
|
|
|
|
|
|
|
Table 4 cont. |
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Nine Months Ended |
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|
2023 |
|
2024 |
|
Reported |
|
Underlying |
|
|
|
|
|
|
|
|
Sales |
|
|
|
|
|
|
|
Final Control |
$ 2,889 |
|
$ 3,037 |
|
5 % |
|
6 % |
Measurement & Analytical |
2,550 |
|
2,942 |
|
15 % |
|
17 % |
Discrete Automation |
1,969 |
|
1,863 |
|
(5) % |
|
(5) % |
Safety & Productivity |
1,034 |
|
1,038 |
|
— % |
|
— % |
Intelligent Devices |
$ 8,442 |
|
$ 8,880 |
|
5 % |
|
6 % |
|
|
|
|
|
|
|
|
Control Systems & Software |
1,892 |
|
2,062 |
|
9 % |
|
10 % |
Test & Measurement |
— |
|
1,104 |
|
|
|
|
|
793 |
|
878 |
|
11 % |
|
11 % |
Software and Control |
$ 2,685 |
|
$ 4,044 |
|
51 % |
|
10 % |
|
|
|
|
|
|
|
|
Eliminations |
(52) |
|
(51) |
|
|
|
|
Total |
$ 11,075 |
|
$ 12,873 |
|
16 % |
|
7 % |
|
|
|
|
|
|
|
|
Sales Growth by Geography |
|
|
|
|
|
|
|
|
Nine Months Ended |
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|
|
|
||
|
5 % |
|
|
|
|
|
|
|
9 % |
|
|
|
|
|
|
|
9 % |
|
|
|
|
|
|
|
|
|
Table 4 cont. |
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Quarter Ended |
|
Quarter Ended |
||||
|
2023 |
|
2024 |
||||
|
As Reported |
|
Adjusted |
|
As |
|
Adjusted |
Earnings |
|
|
|
|
|
|
|
Final Control |
$ 245 |
|
$ 266 |
|
$ 253 |
|
$ 279 |
Margins |
23.7 % |
|
25.7 % |
|
24.2 % |
|
26.8 % |
Measurement & Analytical |
257 |
|
263 |
|
252 |
|
266 |
Margins |
28.1 % |
|
28.7 % |
|
25.6 % |
|
27.0 % |
Discrete Automation |
124 |
|
144 |
|
109 |
|
134 |
Margins |
18.5 % |
|
21.4 % |
|
17.6 % |
|
21.5 % |
Safety & Productivity |
82 |
|
88 |
|
79 |
|
86 |
Margins |
22.7 % |
|
24.3 % |
|
22.5 % |
|
24.7 % |
Intelligent Devices |
$ 708 |
|
$ 761 |
|
$ 693 |
|
$ 765 |
Margins |
23.7 % |
|
25.5 % |
|
23.1 % |
|
25.5 % |
|
|
|
|
|
|
|
|
Control Systems & Software |
144 |
|
151 |
|
168 |
|
178 |
Margins |
21.8 % |
|
22.8 % |
|
23.9 % |
|
25.2 % |
Test & Measurement |
— |
|
— |
|
(88) |
|
76 |
Margins |
|
|
|
|
(24.7) % |
|
21.4 % |
|
27 |
|
148 |
|
49 |
|
170 |
Margins |
8.2 % |
|
46.1 % |
|
14.5 % |
|
50.0 % |
Software and Control |
$ 171 |
|
$ 299 |
|
$ 129 |
|
$ 424 |
Margins |
17.4 % |
|
30.4 % |
|
9.2 % |
|
30.3 % |
|
|
|
|
|
|
|
|
Corporate items and interest expense, net: |
|
|
|
|
|
|
|
Stock compensation |
(56) |
|
(56) |
|
(56) |
|
(47) |
Unallocated pension and postretirement costs |
42 |
|
42 |
|
38 |
|
38 |
Corporate and other |
(43) |
|
(19) |
|
(38) |
|
(24) |
Gain on subordinated interest |
— |
|
— |
|
— |
|
— |
Loss on Copeland note receivable |
— |
|
— |
|
(279) |
|
— |
Interest expense, net |
(10) |
|
— |
|
(56) |
|
— |
Interest income from related party1 |
10 |
|
— |
|
24 |
|
— |
Pretax Earnings / Adjusted EBITA |
$ 822 |
|
$ 1,027 |
|
$ 455 |
|
$ 1,156 |
Margins |
20.8 % |
|
26.0 % |
|
10.4 % |
|
26.4 % |
|
|
|
|
|
|
|
|
Supplemental Total Segment Earnings: |
|
|
|
|
|
|
|
Adjusted Total Segment EBITA |
|
|
$ 1,060 |
|
|
|
$ 1,189 |
Margins |
|
|
26.9 % |
|
|
|
27.1 % |
|
1 Represents interest on the Copeland note receivable through |
|
|
|
Table 4 cont. |
|
||||
|
Quarter Ended |
|
Quarter Ended |
|
||||
|
2023 |
|
2024 |
|
||||
|
Amortization of Intangibles1 |
|
Restructuring and Related Costs2 |
|
Amortization of Intangibles1 |
|
Restructuring and Related Costs2 |
|
Final Control |
$ 22 |
|
$ (1) |
|
$ 21 |
|
$ 5 |
|
Measurement & Analytical |
5 |
|
1 |
|
11 |
|
3 |
|
Discrete Automation |
8 |
|
12 |
|
9 |
|
16 |
|
Safety & Productivity |
7 |
|
(1) |
|
6 |
|
1 |
|
Intelligent Devices |
$ 42 |
|
$ 11 |
|
$ 47 |
|
$ 25 |
|
|
|
|
|
|
|
|
|
|
Control Systems & Software |
6 |
|
1 |
|
6 |
|
4 |
|
Test & Measurement |
— |
|
— |
|
139 |
|
25 |
|
|
121 |
|
— |
|
121 |
|
— |
|
Software and Control |
$ 127 |
|
$ 1 |
|
$ 266 |
|
$ 29 |
|
|
|
|
|
|
|
|
|
|
Corporate |
— |
|
1 |
|
— |
|
6 |
3 |
Total |
$ 169 |
|
$ 13 |
|
$ 313 |
|
$ 60 |
|
|
1 Amortization of intangibles includes |
2 Restructuring and related costs includes |
3 Corporate restructuring of |
|
Quarter Ended |
||
Depreciation and Amortization |
2023 |
|
2024 |
Final Control |
$ 39 |
|
$ 41 |
Measurement & Analytical |
26 |
|
32 |
Discrete Automation |
20 |
|
22 |
Safety & Productivity |
15 |
|
14 |
Intelligent Devices |
100 |
|
109 |
|
|
|
|
Control Systems & Software |
22 |
|
26 |
Test & Measurement |
— |
|
150 |
|
123 |
|
122 |
Software and Control |
145 |
|
298 |
|
|
|
|
Corporate |
12 |
|
10 |
Total |
$ 257 |
|
$ 417 |
Table 5 |
EMERSON AND SUBSIDIARIES ADJUSTED CORPORATE AND OTHER SUPPLEMENTAL (DOLLARS IN MILLIONS, UNAUDITED) |
|
The following table shows the Company's stock compensation and corporate and other expenses on an adjusted basis. The Company's definition of adjusted stock compensation excludes integration-related stock compensation expense. The Company's definition of adjusted corporate and other excludes corporate restructuring and related costs, first year purchase accounting related items and transaction fees, and certain gains, losses or impairments. This metric is useful for reconciling from total adjusted segment EBITA to the Company's consolidated adjusted EBITA. |
|
|
|
|
|
|
Quarter Ended |
|
||
|
|
|
|
|
2023 |
|
2024 |
|
Stock compensation (GAAP) |
|
|
|
|
$ (56) |
|
$ (56) |
|
Integration-related stock compensation expense |
|
|
|
|
— |
|
9 |
1 |
Adjusted stock compensation (non-GAAP) |
|
|
|
|
$ (56) |
|
$ (47) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
||
|
|
|
|
|
2023 |
|
2024 |
|
Corporate and other (GAAP) |
|
|
|
|
$ (43) |
|
$ (38) |
|
Corporate restructuring and related costs |
|
|
|
|
1 |
|
1 |
|
Acquisition / divestiture costs |
|
|
|
|
38 |
|
13 |
|
National Instruments investment gain |
|
|
|
|
(12) |
|
— |
|
AspenTech Micromine purchase price hedge |
|
|
|
|
(3) |
|
— |
|
Adjusted corporate and other (non-GAAP) |
|
|
|
|
$ (19) |
|
$ (24) |
|
|
1 Integration-related stock compensation expense relates to NI and includes |
Table 6 |
EMERSON AND SUBSIDIARIES ADJUSTED EBITA & EPS SUPPLEMENTAL (AMOUNTS IN MILLIONS EXCEPT PER SHARE, UNAUDITED) |
|
The following tables, which show results on an adjusted EBITA basis and diluted earnings per share on an adjusted basis, are intended to supplement the Company's discussion of its results of operations herein. The Company defines adjusted EBITA as earnings excluding interest expense, net, income taxes, intangibles amortization expense, restructuring expense, first year purchase accounting related items and transaction fees, and certain gains, losses or impairments. Adjusted earnings per share excludes intangibles amortization expense, restructuring expense, first year purchase accounting related items and transaction-related costs, and certain gains, losses or impairments. Adjusted EBITA, adjusted EBITA margin, and adjusted earnings per share are measures used by management and may be useful for investors to evaluate the Company's operational performance. |
|
|
Quarter Ended |
||
|
2023 |
|
2024 |
Pretax earnings |
$ 822 |
|
$ 455 |
Percent of sales |
20.8 % |
|
10.4 % |
Interest expense, net |
10 |
|
56 |
Interest income from related party1 |
(10) |
|
(24) |
Amortization of intangibles |
169 |
|
313 |
Restructuring and related costs |
13 |
|
60 |
Acquisition/divestiture fees and related costs |
38 |
|
17 |
|
(12) |
|
— |
AspenTech Micromine purchase price hedge |
(3) |
|
— |
Loss on Copeland note receivable |
— |
|
279 |
Adjusted EBITA |
$ 1,027 |
|
$ 1,156 |
Percent of sales |
26.0 % |
|
26.4 % |
|
|
|
|
|
Quarter Ended |
||
|
2023 |
|
2024 |
GAAP earnings from continuing operations per share |
$ 1.12 |
|
$ 0.60 |
Amortization of intangibles |
0.15 |
|
0.35 |
Restructuring and related costs |
0.02 |
|
0.08 |
Acquisition/divestiture fees and related costs |
0.07 |
|
0.02 |
|
(0.02) |
|
— |
Interest income on undeployed proceeds from Copeland transaction |
(0.05) |
|
— |
Loss on Copeland note receivable |
— |
|
0.38 |
Adjusted earnings from continuing operations per share |
$ 1.29 |
|
$ 1.43 |
Less: |
(0.11) |
|
(0.14) |
Adjusted earnings per share excluding |
$ 1.18 |
|
$ 1.29 |
|
|
|
|
1 Represents interest on the Copeland note receivable through |
Table 6 cont. |
|||||||||||
Quarter Ended |
|||||||||||
|
Pretax |
|
Income |
|
Earnings from |
|
Non-Controlling Interests3 |
|
Net |
|
Diluted |
As reported (GAAP) |
$ 455 |
|
$ 88 |
|
$ 367 |
|
$ 23 |
|
$ 344 |
|
$ 0.60 |
Amortization of intangibles |
313 |
1 |
74 |
|
239 |
|
40 |
|
199 |
|
0.35 |
Restructuring and related costs |
60 |
2 |
14 |
|
46 |
|
— |
|
46 |
|
0.08 |
Acquisition/divestiture fees and related costs |
17 |
|
2 |
|
15 |
|
— |
|
15 |
|
0.02 |
Loss on Copeland note receivable |
279 |
|
62 |
|
217 |
|
— |
|
217 |
|
0.38 |
Adjusted (non-GAAP) |
$ 1,124 |
|
$ 240 |
|
$ 884 |
|
$ 63 |
|
$ 821 |
|
$ 1.43 |
Interest expense, net |
56 |
|
|
|
|
|
|
|
|
|
|
Interest income from related party4 |
(24) |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITA (non-GAAP) |
$ 1,156 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Amortization of intangibles includes |
|||||||||||
2 Restructuring and related costs includes |
|||||||||||
3 Represents the non-controlling interest in |
|||||||||||
4 Represents interest on the Copeland note receivable through |
Table 7 |
EMERSON AND SUBSIDIARIES ASPENTECH CONTRIBUTION TO EMERSON RESULTS SUPPLEMENTAL (AMOUNTS IN MILLIONS EXCEPT PER SHARE, UNAUDITED) |
|
The following tables reconcile the financial results of AspenTech reported to its shareholders with the amounts included in Emerson's consolidated financial results. Emerson currently owns approximately 57 percent of the common shares outstanding of |
|
Quarter Ended |
|||||||||||
|
Pretax |
|
Income |
|
Earnings from |
|
Non-Controlling Interests4 |
|
Net |
|
Diluted |
Standalone reporting (GAAP) |
$ 53 |
1 |
$ 8 |
|
$ 45 |
|
|
|
|
|
|
Other |
(1) |
|
(5) |
|
4 |
|
|
|
|
|
|
Reported in Emerson consolidation (GAAP) |
52 |
|
3 |
|
49 |
|
21 |
|
28 |
|
$ 0.05 |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangibles |
121 |
2 |
27 |
|
94 |
|
40 |
|
54 |
|
0.09 |
Adjusted (Non-GAAP) |
$ 173 |
|
$ 30 |
|
$ 143 |
|
$ 61 |
|
$ 82 |
|
$ 0.14 |
Interest income |
(14) |
3 |
|
|
|
|
|
|
|
|
|
Stock compensation |
11 |
3 |
|
|
|
|
|
|
|
|
|
Adjusted segment EBITA (non-GAAP) |
$ 170 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation to Segment EBIT |
|||||||||||
Pre-tax earnings |
$ 52 |
|
|
|
|
|
|
|
|
|
|
Interest income |
(14) |
3 |
|
|
|
|
|
|
|
|
|
Stock compensation |
11 |
3 |
|
|
|
|
|
|
|
|
|
Segment EBIT (GAAP) |
$ 49 |
|
|
|
|
|
|
|
|
|
|
Amortization of intangibles |
121 |
2 |
|
|
|
|
|
|
|
|
|
Adjusted segment EBITA (non-GAAP) |
$ 170 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Amount reflects |
|||||||||||
2 Amortization of intangibles includes |
|||||||||||
3 Reported in Emerson corporate line items. |
|||||||||||
4 Represents the non-controlling interest in |
Reconciliations of Non-GAAP Financial Measures & Other |
|
Table 8 |
|||||
|
|
|
|
|
|
|
|
Reconciliations of Non-GAAP measures with the most directly comparable GAAP measure (dollars in millions, except per share amounts). See |
|
||||||
|
|
|
|
|
|
|
|
2024 Q3 Underlying Sales Change |
Reported |
(Favorable) / |
(Acquisitions) / Divestitures |
Underlying |
|||
Final Control |
1 % |
1 % |
— % |
2 % |
|||
Measurement & Analytical |
8 % |
1 % |
— % |
9 % |
|||
Discrete Automation |
(8) % |
2 % |
— % |
(6) % |
|||
Safety & Productivity |
(3) % |
— % |
— % |
(3) % |
|||
Intelligent Devices |
1 % |
1 % |
— % |
2 % |
|||
Control Systems & Software |
6 % |
1 % |
— % |
7 % |
|||
Test & Measurement |
|
|
|
|
|||
|
7 % |
— % |
— % |
7 % |
|||
Software and Control |
42 % |
1 % |
(36) % |
7 % |
|||
Emerson |
11 % |
1 % |
(9) % |
3 % |
|||
|
|||||||
Nine Months Ended |
Reported |
(Favorable) / |
(Acquisitions) / Divestitures |
Underlying |
|||
Final Control |
5 % |
1 % |
— % |
6 % |
|||
Measurement & Analytical |
15 % |
1 % |
1 % |
17 % |
|||
Discrete Automation |
(5) % |
— % |
— % |
(5) % |
|||
Safety & Productivity |
— % |
— % |
— % |
— % |
|||
Intelligent Devices |
5 % |
1 % |
— % |
6 % |
|||
Control Systems & Software |
9 % |
— % |
1 % |
10 % |
|||
Test & Measurement |
|
|
|
|
|||
|
11 % |
— % |
— % |
11 % |
|||
Software and Control |
51 % |
— % |
(41) % |
10 % |
|||
Emerson |
16 % |
1 % |
(10) % |
7 % |
Underlying Growth Guidance |
2024 Guidance |
Reported (GAAP) |
~15% |
(Favorable) / Unfavorable FX |
~0.5 pts |
(Acquisitions) / Divestitures |
~(9.5) pts |
Underlying (non-GAAP) |
~6% |
2023 Q3 Adjusted Segment EBITA |
EBIT |
EBIT Margin |
Amortization of Intangibles |
Restructuring |
Adjusted |
Adjusted |
Final Control |
$ 245 |
23.7 % |
$ 22 |
$ (1) |
$ 266 |
25.7 % |
Measurement & Analytical |
257 |
28.1 % |
5 |
1 |
263 |
28.7 % |
Discrete Automation |
124 |
18.5 % |
8 |
12 |
144 |
21.4 % |
Safety & Productivity |
82 |
22.7 % |
7 |
(1) |
88 |
24.3 % |
Intelligent Devices |
$ 708 |
23.7 % |
$ 42 |
$ 11 |
$ 761 |
25.5 % |
Control Systems & Software |
144 |
21.8 % |
6 |
1 |
151 |
22.8 % |
Test & Measurement |
— |
— % |
— |
— |
— |
— % |
|
27 |
8.2 % |
121 |
— |
148 |
46.1 % |
Software and Control |
$ 171 |
17.4 % |
$ 127 |
$ 1 |
$ 299 |
30.4 % |
|
||||||
2024 Q3 Adjusted Segment EBITA |
EBIT |
EBIT Margin |
Amortization
|
Restructuring |
Adjusted |
Adjusted |
Final Control |
$ 253 |
24.2 % |
$ 21 |
$ 5 |
$ 279 |
26.8 % |
Measurement & Analytical |
252 |
25.6 % |
11 |
3 |
266 |
27.0 % |
Discrete Automation |
109 |
17.6 % |
9 |
16 |
134 |
21.5 % |
Safety & Productivity |
79 |
22.5 % |
6 |
1 |
86 |
24.7 % |
Intelligent Devices |
$ 693 |
23.1 % |
$ 47 |
$ 25 |
$ 765 |
25.5 % |
Control Systems & Software |
168 |
23.9 % |
6 |
4 |
178 |
25.2 % |
Test & Measurement |
(88) |
(24.7) % |
139 |
25 |
76 |
21.4 % |
|
49 |
14.5 % |
121 |
— |
170 |
50.0 % |
Software and Control |
$ 129 |
9.2 % |
$ 266 |
$ 29 |
$ 424 |
30.3 % |
Total Adjusted Segment EBITA |
|
2023 Q3 |
2024 Q3 |
Pretax earnings (GAAP) |
|
$ 822 |
$ 455 |
Margin |
|
20.8 % |
10.4 % |
Corporate items and interest expense, net |
|
57 |
367 |
Amortization of intangibles |
|
169 |
313 |
Restructuring and related costs |
|
12 |
54 |
Adjusted segment EBITA (non-GAAP) |
|
$ 1,060 |
$ 1,189 |
Margin |
|
26.9 % |
27.1 % |
Free Cash Flow |
|
2023 Q3 |
2024 Q3 |
|
2024E ($ in billions) |
Operating cash flow (GAAP) |
|
$ 842 |
$ 1,067 |
|
~$3.2 |
Capital expenditures |
|
(73) |
(92) |
|
~(0.4) |
Free cash flow (non-GAAP) |
|
$ 769 |
$ 975 |
|
|
|
Note 1: Underlying sales and orders exclude the impact of currency translation and significant acquisitions and divestitures. |
Note 2: All fiscal year 2024E figures are approximate, except where range is given. |
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SOURCE Emerson