Emerson Electric Company (EMR) has reported 32.41 percent plunge in profit for the quarter ended Sep. 30, 2016. The company has earned $438 million, or $0.68 a share in the quarter, compared with $648 million, or $0.98 a share for the same period last year. On an adjusted basis, earnings per share were at $0.96 for the quarter compared with $0.93 in the same period last year. Revenue during the quarter dropped 6.47 percent to $3,932 million from $4,204 million in the previous year period. Gross margin for the quarter expanded 20 basis points over the previous year period to 43.57 percent. Total expenses were 81.61 percent of quarterly revenues, up from 77.85 percent for the same period last year. That has resulted in a contraction of 376 basis points in operating margin to 18.39 percent.
Operating income for the quarter was $723 million, compared with $931 million in the previous year period.
"Fiscal 2016 was a significantly more challenging year than expected," said chairman and chief executive officer David N. Farr. "When we determined the anticipated second half recovery in our businesses would not materialize, we took the necessary, and often difficult, actions required to bring our cost structure in line with current business conditions and trends. In 2016, we spent $112 million for restructuring which increased our two-year total restructuring spend to $333 million. By focusing on the things under our control we were able to limit the impact on operating margin to 40 basis points during this difficult year."
Emerson Electric Co projects revenue to grow in the range of 1 percent to 3 percent for the financial year 2017. For financial year 2017, the company forecasts diluted earnings per share to be in the range of $2.35 to $2.50.
Operating cash flow improvesEmerson Electric Co has generated cash of $2,881 million from operating activities during the year, up 13.92 percent or $352 million, when compared with the last year. The company has spent $626 million cash to meet investing activities during the year as against cash inflow of $591 million in the last year.
The company has spent $2,045 million cash to carry out financing activities during the year as against cash outgo of $2,948 million in the last year period.
Cash and cash equivalents stood at $3,182 million as on Sep. 30, 2016, up 4.19 percent or $128 million from $3,054 million on Sep. 30, 2015.
Working capital declines
Emerson Electric Co has witnessed a decline in the working capital over the last year. It stood at $1,952 million as at Sep. 30, 2016, down 13.21 percent or $297 million from $2,249 million on Sep. 30, 2015. Current ratio was at 1.24 as on Sep. 30, 2016, down from 1.29 on Sep. 30, 2015.
Debt comes down marginally
Emerson Electric Co has recorded a decline in total debt over the last one year. It stood at $6,646 million as on Sep. 30, 2016, down 2.85 percent or $195 million from $6,841 million on Sep. 30, 2015. Total debt was 30.57 percent of total assets as on Sep. 30, 2016, compared with 30.97 percent on Sep. 30, 2015. Debt to equity ratio was at 0.87 as on Sep. 30, 2016, up from 0.84 as on Sep. 30, 2015. Interest coverage ratio deteriorated to 14.76 for the quarter from 21.16 for the same period last year. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: [email protected]
