NYSE$EMR

Emerson Electric Co · Q2 2020 earnings

Q2 2020 earnings · · Investor relations

Briefing

Emerson's Q2 2020 results were reported, with sales impacted by COVID-19 and updated full-year guidance announced.

Emerson reported a 9% decrease in net sales to $4.2 billion due to the COVID-19 pandemic, while adjusted EPS was $0.89, exceeding management's guidance. The company updated its full-year sales and EPS guidance to reflect the weaker demand environment.

  • Net sales decreased by 9 percent, with underlying sales down 7 percent due to COVID-19 impacts.
  • GAAP EPS was $0.84, flat year-over-year, while adjusted EPS was $0.89, surpassing guidance.
  • Operating cash flow was strong at $588 million, up 10 percent, and free cash flow was $477 million, up 15 percent.
  • Full-year sales and EPS guidance were updated to reflect the weaker demand environment.

Headline financials

Total Revenue

$4.16B

Previous: $4.57B-8.9%
EPS (adj)

$0.89

Previous: $0.84+6.0%
Capital Expenditures

-$225M

Previous: -$274M+17.9%
Free Cash Flow

$292M

Previous: $246M+18.7%
Net Income

$517M

Previous: $520M-0.6%
Operating Income

-$3.43B

Previous: -$3.8B+9.8%
Gross Profit

$1.75B

Previous: $1.93B-9.1%
Cash & Equivalents

$2.58B

Previous: $1.38B+86.6%
Total Assets

$21.7B

Previous: $21.1B+3.0%
Stock-Based Comp

-$38M

Previous: $59M-164.4%

Revenue & EPS history

Emerson · Revenue · Quarterly

$4.16B

Q2 2020-8.9%vs Q2 2019
Beat estimate in 13 of 16 quarters(81%)
ActualEstimate

Revenue by segment

Emerson · $3.15B total across 1 segment · Q4 2023

  • Intelligent Devices
    $3.15B

Forward guidance

Management updated the fiscal year 2020 outlook to reflect the changing demand environment associated with COVID-19 and the concurrent unfolding energy market dynamics. GAAP earnings per share guidance is $2.62 to $2.82. Adjusted earnings per share guidance, which excludes restructuring actions and related costs, is $3.00 to $3.20.

Tailwinds

  • Aggressive cost containment actions
  • Reduced stock compensation
  • Other non-operating items
  • Total restructuring actions for the year are now expected to be approximately $280 million
  • There is no change in the dividend plan

Headwinds

  • Continued significant demand deterioration in the third quarter
  • Demand remaining negative through the first half of 2021
  • Oil prices stabilize in the $20-$30 range during that time period
  • Net Sales Growth (11%) - (9%)
  • Automation Solutions (10%) - (8%)

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q2 2020

Historical avgQ2 2020

-0.3%

Avg return

Earnings day

+1.7%

Avg return

5 days after

+1.5%

Avg return

30 days after

40%

29 / 73 earnings

Positive

+15.5%

Q4 2024

Best reaction

-7.6%

Q4 2023

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q2 2026+6.8%+4.3%+2.5%
Q1 2026-1.0%+5.2%-9.0%
Q4 2025-3.9%+2.1%+3.8%
Q3 2025-0.8%-0.7%-1.0%
Q2 2025+2.4%+11.3%+15.1%
Q1 2025-2.3%-0.7%-7.1%
Q4 2024+15.5%+15.9%+21.3%
Q3 2024-2.9%-4.4%-8.9%
Q2 2024+7.6%+6.9%+0.5%
Q1 2024+8.6%+10.6%+16.9%
Q4 2023-7.6%-5.7%-3.3%
Q3 2023+4.6%+6.1%+8.0%
Q2 2023+0.6%+1.9%+0.7%
Q1 2023-6.6%-4.7%-9.9%
Q4 2022-1.8%+2.8%+2.3%
Q3 2022-2.8%-0.9%-7.1%
Q2 2022-1.4%-6.7%-0.2%
Q1 2022+4.4%+3.5%-1.0%
Q4 2021-3.0%-2.4%-9.9%
Q3 2021-0.1%+0.0%+4.2%
Q2 2021+2.9%+4.7%+7.8%
Q1 2021+3.5%+6.5%+9.5%
Q4 2020+0.3%+3.2%+11.1%
Q3 2020+3.1%+5.7%+9.5%
Q2 2020+2.3%+5.7%+10.5%
Q1 2020+4.7%+1.6%-10.8%
Q4 2019+0.5%+0.9%+1.0%
Q3 2019+0.2%+0.1%+4.0%
Q2 2019-5.5%-4.6%-10.7%
Q1 2019-0.9%-1.3%-0.5%
Q4 2018-0.7%-2.6%-9.3%
Q3 2018+3.4%+3.1%+6.4%
Q2 2018+1.8%+3.0%+6.7%
Q1 2018+0.8%+0.9%+2.6%
Q4 2017-3.1%-4.5%+2.0%
Q3 2017+2.3%+2.6%-1.0%
Q2 2017-1.8%-2.4%-1.9%
Q1 2017+4.3%+5.7%-1.0%
Q4 2016-1.3%-2.5%+12.0%
Q3 2016-5.1%-3.8%-5.8%
Q2 2016-4.4%
Q1 2016+1.3%
Q4 2015+2.8%
Q3 2015-2.8%
Q2 2015-2.1%
Q1 2015-2.8%
Q4 2014-0.2%
Q3 2014-3.3%
Q2 2014-0.6%
Q1 2014-0.8%
Q4 2013+0.1%
Q3 2013-1.1%
Q2 2013-0.2%
Q1 2013-0.1%
Q4 2012-0.4%
Q3 2012+2.1%
Q2 2012-5.8%
Q1 2012-2.5%
Q4 2011-3.8%
Q3 2011-6.3%
Q2 2011-3.3%
Q1 2011-0.2%
Q4 2010+1.0%
Q3 2010-0.6%
Q2 2010-3.5%
Q1 2009-3.2%
Q1 2010+0.0%
Q4 2009+1.4%
Q2 2009+1.4%
Q3 2009-3.8%
Q3 2008-3.8%
Q4 2007-3.8%
Q4 2008-3.8%

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