Emerson Electric's stock falls sharply after profit misses analyst estimate as two business units book negative orders

By Steve Gelsi

Automation equipment company's profit rises by 33% but still doesn't measure up to expectations.

Emerson Electric Co.'s stock on Tuesday fell by the largest percentage margin since June 2020, after the industrial-automation company's fiscal fourth-quarter earnings fell short of analyst estimates.

The company said it has booked negative orders for the past two or three quarters in its Discrete Automation and Test & Measurement units, but it expects the trend to turn positive in the second half of next year.

Emerson Electric's (EMR) fourth-quarter earnings for the three months ended Sept. 30 rose by about 33% to $904 million, or $1.22 a share, from $603 million, or 82 cents a share, in the year-ago quarter.

Fourth-quarter adjusted earnings rose to $1.29 a share, from $1.07 a share. The latest figure fell 2 cents short of the FactSet consensus estimate of $1.31 a share.

Revenue rose 5% to just under $4.1 billion, but missed the analyst estimate of $4.2 billion.

Emerson Electric's stock dropped 7.9%, on track for its largest one-day loss since it fell 8.2% on June 11, 2020, according to Dow Jones Market Data. The stock is trading 19.7% below its all-time closing high of $105.70 on Sept. 2, 2021.

Looking ahead at the first quarter, Emerson Electric said it expects adjusted earnings of $1 to $1.05 a share, compared to the analyst estimate of $1.02 a share.

The company said it is expecting adjusted earnings of $5.15 a share to $5.35 a share in 2024, ahead of the analyst estimate of $4.93 a share. Emerson Electric also plans to buy back $500 million of stock in 2024.

-Steve Gelsi

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11-07-23 1233ET

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