Emerson Electric Co. EMR is likely to witness bottom and top-line growth when it reports fourth-quarter fiscal 2024 (ended Sept. 30, 2024) results on Nov. 5, before market open. The Zacks Consensus Estimate for revenues is pegged at $4.58 billion, indicating growth of 11.9% from the prior-year quarter’s figure.

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The consensus mark for earnings is pinned at $1.47 per share, which has remained steady in the past 60 days. The figure indicates a jump of 14% from the prior-year figure. The company’s bottom line surpassed the Zacks Consensus Estimate by 0.7% in the last reported quarter. In the trailing four quarters, EMR missed estimates once but managed to beat on other occasions, delivering an average earnings surprise of 6.3%.

Let’s see how things have shaped up for Emerson Electric prior to the announcement.

Factors Likely to Have Shaped EMR’s Quarterly Performance

Strength across Emerson’s Final Control business, driven by solid momentum in energy and power end markets, is likely to have supplemented the top-line performance of its Intelligent Devices segment. The segment’s results are likely to reflect robust growth in all geographies and strong backlog conversion level within the Measurement & Analytical business. We expect the Intelligent Devices segment’s revenues to increase 0.5% from the year-ago fiscal quarter to $3.2 billion.

Strength in the control systems and software business, driven by strength in the power, process and hybrid end markets, is likely to have augmented the performance of the Software and Control segment. Solid momentum in aerospace and defense end markets, driven by increasing government spending within the Test & Measurement business, is expected to have acted as a tailwind for the segment. We anticipate the segment’s revenues to increase 45.3% year over year to $1.4 billion.

EMR acquired Afag and Flexim in the fourth quarter of fiscal 2023 (ended September 2023). The buyout of Afag boosted Emerson’s capabilities in factory automation, helping it expand into lucrative end markets, battery manufacturing, automotive, packaging, medical, life sciences and electronics. The acquisition of Flexim added to its existing flow measurement positions in coriolis, differential pressure, magmeter and vortex flow measurement and expanded its automation portfolio and measurement capabilities.

Also, EMR’s acquisition of National Instruments (October 2023), which has expanded its presence in high-growth end markets, including semiconductor and electronics, transportation and electric vehicles, is likely to have augmented its top line.

We expect the company’s total revenues to be $4.6 billion, indicating an increase of 11.5% year over year. Adjusted earnings are expected to be $1.46 per share, indicating a 12.9% increase from the year-ago quarter’s number.

However, escalating costs and expenses, related to its acquisition, and restructuring-related actions are likely to have affected EMR’s margin performance. We expect the company’s cost of sales to be $2.2 billion, indicating an increase of 6.7% year over year

Also, given the company’s substantial international operations, foreign currency headwinds are likely to have marred its margins and profitability.

Earnings Whispers

Our proven model predicts an earnings beat for EMR this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here, as elaborated below. 

Earnings ESP: EMR has an Earnings ESP of +0.85% as the Most Accurate Estimate is pegged at $1.48 per share, which is higher than the Zacks Consensus Estimate of $1.47. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: EMR currently carries a Zacks Rank of 3.

Performance of Other Industrial Companies

Avery Dennison Corporation AVY delivered third-quarter adjusted earnings of $2.33 per share, which beat the Zacks Consensus Estimate of $2.32. The bottom line increased 9% year over year, driven by higher volume and productivity gains.

Total revenues grew 4.1% year over year to $2.18 billion and missed the consensus estimate of $2.2 billion.

A. O. Smith Corporation’s AOS third-quarter adjusted earnings of 82 cents per share matched the Zacks Consensus Estimate. The bottom line decreased 8.9% on a year-over-year basis.

Net sales of $902.6 million missed the consensus estimate of $913 million. The top line decreased 4% year over year due to lower sales in China and decreased volumes of water heaters in North America.

Another Stock to Consider

Here is a company, which according to our model, also has the right combination of elements to beat on earnings this reporting cycle.

Tenaris S.A. TS has an Earnings ESP of +10.22% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company is scheduled to release third-quarter 2024 results on Nov. 6. Tenaris’ earnings surpassed the Zacks Consensus Estimate in two of the preceding four quarters, while missing the mark in the other two, the average surprise being 11.6%.

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Emerson Electric Co. (EMR) : Free Stock Analysis Report

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