Emerson Electric Reports 8% Sales Growth In Q1; Raises FY22 Guidance

Emerson Electric Co EMR reported first-quarter FY22 net sales growth of 8% year-over-year to $4.47 billion, in line with the consensus of $4.47 billion. Underlying sales were up 8%.
Adjusted EPS improved 13% Y/Y to $1.05, beating the consensus of $0.99.
Sales by segments: Measurement & Analytical Instrumentation $735 million (+5.3% Y/Y), Valves, Actuators & Regulators $816 million (+1.2% Y/Y), Industrial Solutions $566 million (+11.4% Y/Y), Systems & Software $688 million (+1.2% Y/Y), Climate Technologies $1.16 billion (+12.8% Y/Y) and Tools & Home Products $508 million (+14.2% Y/Y).
December trailing three-month underlying orders were up 17%, as demand continued to be strong across all world areas and major end markets.
The pretax margin was 26.3%, up 1280 bps for the quarter. Adjusted EBITA margin was 19.6%, up by 140 bps.
Operating cash flow was $523 million (-35% Y/Y), and free cash flow was $407 million (-41% Y/Y); cash flow results reflect higher inventory due to supply chain constraints.
The company declared a quarterly cash dividend of $0.515 per share, payable March 10, 2022, to stockholders of record on February 11, 2022.
2Q22 Outlook: Emerson Electric expects net sales growth of 4% - 6% with underlying sales growth of 6% - 8%. It expects an adjusted EPS of $1.15 - $1.20 versus the consensus of $1.19.
FY22 Outlook: Emerson Electric expects net sales growth of 6% - 8% (prior expectation 5% - 7%), with underlying sales growth of 7% - 9% (prior 6% - 8%).
It expects an adjusted EPS of $4.90 - $5.05 (prior $4.82 - $4.97) versus the consensus of $4.91.
Price Action: EMR shares are trading higher by 0.56% at $93 during the premarket session on Wednesday.

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